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TABLE O F C ON TE NTS VO LUM E 25 , N U M B E R 3

EDITOR IN CHIEF Carol K. Muranaka BOARD OF EDITORS Christine Daleiden Susan Gochros Ryan Hamaguchi Cynthia Johiro Edward Kemper Laurel Loo Melvin M.M. Masuda Eaton O'Neill Lennes Omuro Brett Tobin

ARTICLES 44

Condominium Association Nonjudicial Foreclosures — Recent Developments by M. Anne Anderson and Paul Ireland Koftinow

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On the cover: Tahiti collection 5 By Louis Pohl (1915 – December 22, 1999) Pohl was an American painter, illustrator, art teacher, printmaker and cartoonist. He was born in Cincinnati, Ohio in 1915. In 1946, Pohl got a call from the Board of Directors of the Honolulu Museum of Art who was establishing a professional art school and invited Pohl to come to Hawaii to start the school, where Pohl taught for 35 years. Pohl also taught art at the Kamehameha Schools for 15 years. In 1960, he wrote and illustrated the book, It's Really Nice! The Fine Arts Museums of San Francisco, the Hawaii State Art Museum, the Honolulu Museum of Art, and the Isaacs Art Center (Waimea, Hawaii), are among the public collections holding works by Pohl. The Louis Pohl Collection is now located at the The Downtown Art Center, 1041 Nuuanu Ave. Honolulu.

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Condominium Association Nonjudicial Foreclosures — Recent Developments

by M. Anne Anderson and Paul Ireland Koftinow I.

Introduction. Condominium associations throughout Hawaii have relied upon legislation developed over the last two decades to allow them to foreclose their liens against units of owners who fail to pay assessments using the nonjudicial foreclosure procedures found in Hawaii Revised Statutes (“HRS”) Chapter 667. On July 26, 2018, the Hawaii Intermediate Court of Appeals (“ICA”) rendered a decision that shook the community association industry throughout the state. The ICA ruled in a case known as Sakal v. Association of Apartment Owners of Hawaiian Monarch (“ICA Sakal”) that condominium associations lack the authority to foreclose nonjudicially absent a power of sale provision in their bylaws or other enforceable agreement with the owner.1 On November 29, 2018, the ICA reached the same conclusion in Malabe v. Association of Apartment Owners of Executive Centre (“ICA Malabe”).2 In both cases, the former owners whose units had been foreclosed upon brought claims for wrongful foreclosure against their respective associations. In ICA Sakal, the owner also sought to regain title to his unit, whereas in ICA Malabe, the owners brought an unfair and deceptive acts and practices (“UDAP”) claim. The ICA found that the owners in both cases could pursue their claims for wrongful foreclosure, but that the owner in ICA Sakal could not recover title and the owners in ICA Malabe could not pursue their UDAP claim because those claims were not timely.

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The Hawaii Supreme Court accepted applications for writ of certiorari filed by the owners in both cases. The condominium associations in both cases filed applications for writ of certiorari, but the Supreme Court only accepted the application for writ of certiorari filed by the association in Malabe. Meanwhile, the Hawaii legislature disagreed with the ICA’s decision in ICA Sakal and ICA Malabe and adopted legislation which became law as 2019 Haw. Sess. Laws Act 282 (“Act 282”), §§ 1-9, at 779-783. Act 282 amended HRS §§ 514B-146(a) and 667-1 to specifically state that the lien of an association may be foreclosed by action or by nonjudicial or power of sale foreclosure, regardless of the presence or absence of power of sale language in an association’s governing documents and contained a clause making these two sections retroactive. On June 17, 2020, the Hawaii Supreme Court affirmed the ruling in ICA Malabe that the association was not empowered to foreclose nonjudicially under HRS § 667-5, located in Part I of HRS Chapter 667 (2010). See Malabe v. Ass’n of Apartment Owners of Executive Ctr. by & through Bd. of Directors, 147 Hawaii 330, 465 P.3d 777 (2020). HRS § 667-5 is an older version of the nonjudicial foreclosure law, which was repealed in 2012. The Court declined to rule on the constitutional issue related to the retroactive clause in Act 282 because it determined that the issue was not squarely before it. Id. at 333, 465 P.3d at 780. The Court vacated the ICA’s decision in ICA Malabe that the owners’ UDAP claim was barred by the statute of limitations. Id. at 333334, 465 P.3d at 780-781. The following day, on June 18, 2020,

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the Hawaii Supreme Court vacated the ICA’s decision in ICA Sakal that the owner was barred from making a claim to title to the unit. See Sakal v. Ass’n of Apartment Owners of Hawaiian Monarch, 148 Hawaii 1, 466 P.3d 399 (2020). Both cases were remanded to the circuit court for further action. The Hawaii Supreme Court’s decisions were not entirely unanimous, being split three to two on critical issues. Within days after the Hawaii Supreme Court rendered its decisions, Justice Pollack, who was part of the majority, retired. II. Background of Association Nonjudicial Foreclosure Legislation Prior to the ICA’s Decisions in ICA Sakal and ICA Malabe. Hawaii’s condominium property regimes are creatures of statute. Over time, the legislature passed various amendments to HRS Chapters 514A, 514B, and 667 pertaining to condominium association nonjudicial foreclosures. Both the ICA and Hawaii Supreme Court considered legislative history when rendering their decisions. A brief discussion of legislative history pertaining to condominium nonjudicial foreclosure law is therefore important to aid the reader in understanding the recent appellate court decisions. A. HRS Chapter 667 Part I. In 1874, “An Act to Provide for the Sale of Mortgaged Property Without Suit and Decree of Sale” was enacted by King Kalakaua and the Legislative Assembly of the Hawaiian Islands. Laws 1874, Act 33, at 31-32. Section 1 of the Act allowed for nonjudicial foreclosures “[w]hen a power of sale is contained in a mortgage.” The language of Section 1, as amended, later became HRS § 667-5. Over time, HRS Chapter 667 was divided into parts. HRS § 667-5 was contained in Part I until it was repealed in 2012. HRS § 667-5 (repealed Jun. 28, 2012 by 2012 Haw. Sess. Laws Act 182). The references herein to “Part I” shall mean Part I of HRS Chapter 667 as it existed in 2010, at the time of the nonjudicial foreclosure sale in Malabe. B. HRS Chapter 667 Part II. In 1998, the legislature adopted a new Part II (“Part II”) to Chapter 667 to allow power of sale foreclosures by condominium associations where “a law or a written document . . . authorizes, permits, or provides for a power of sale, a power of sale foreclosure, a power of sale remedy, or a nonjudicial foreclosure.” See 1998 Haw. Sess. Laws Act 122, § 1, at 468-477. Thus, associations were permitted to foreclose nonjudicially where authorized by law or a written document. C. Amendments to HRS Chapter 514A. The following year, in 1999, the legislature amended HRS § 514A-90(a)3 to allow condominium associations to enforce their automatic statutory liens “by non-judicial or power of 6 March 2021

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sale foreclosure procedures set forth in chapter 667[.]” See 1999 Haw. Sess. Laws Act 236 (“Act 236”), §4, at 727. The legislature also amended HRS § 514A-82(b) by adding a new subsection (13), which provided that a lien created by HRS § 514A-90(a) “may be enforced by the association in any manner permitted by law, including non-judicial or power of sale foreclosure procedures authorized by chapter 667[.]” See Act 236, § 3, at 727 (emphasis added). This new subsection was significant because all subsections under HRS § 514A-82(b), which included the new HRS § 514A-82(b)(13), were “deemed incorporated into the bylaws of all condominium projects existing as of January 1, 1988, and all condominium projects created after that date.” See HRS § 514A-82(b), last paragraph. D. Adoption of HRS Chapter 514B. HRS Chapter 514B took effect on July 1, 2006. See 2004 Haw. Sess. Laws Act 164 (“Act 164”), § 35, at 815-816, and 2005 Haw. Sess. Laws Act 93, § 7, at 237. HRS Section 514B-146(a) provided, in relevant part, that “[t]he lien of the association may be foreclosed by action or by nonjudicial or power of sale foreclosure procedures set forth in chapter 667 . . . in like manner as a mortgage of real property.” See Act 164, § 2, at 785; HRS § 514B-146(a) (2006). Later, in response to increases in mortgage foreclosures and an economic recession, the legislature imposed a moratorium on nonjudicial mortgage foreclosures in 2011. However, the legislature recognized, in its Conference Committee Report to Act 48 (2011 Haw. Sess. Laws), that condominium associations had been using Part I of Chapter 667 to foreclose nonjudicially and “preserved the right of associations to foreclose on liens under part II of chapter 667.”4 E. HRS Chapter 667 Part VI. In 2012, the legislature adopted a new Part VI (“Part VI”) to HRS Chapter 667 which provided for nonjudicial foreclosure procedures specifically designed for use by condominium and planned community associations. See 2012 Haw. Sess. Laws Act 182 (“Act 182”), § 3, at 636-648. Part VI recognizes that an association may conduct nonjudicial foreclosures “pursuant to the power of sale provision in the law or association documents.” Act 182, § 3, at 643; HRS § 667-101(a)(1) (Supp 2012). In reliance upon HRS § § 514A-82(b)(13), 514A-90(a), and 514B-146(a), a number of condominium associations have foreclosed their liens using the nonjudicial foreclosure procedures found in HRS Chapter 667. III. Factual and Procedural Backgrounds. A. Malabe - Circuit Court Proceedings. In Malabe, the Association of Apartment Owners of Executive Centre (“Executive Centre”) conducted a nonjudicial

foreclosure against an apartment owned by Gilbert and Daisy Malabe (the “Malabes”) under HRS § 667-5. Almost six years after the sale, the Malabes filed a complaint against Executive Centre alleging claims of wrongful foreclosure and UDAP violations. Executive Centre filed a motion to dismiss the complaint under Hawaii Rules of Civil Procedure (“HRCP”) Rule 12(b)(6), arguing that: 1) the foreclosure was properly conducted under Part I; 2) the UDAP claim was time-barred because it was filed more than four years after the sale took place; 3) Hawaii had not recognized a claim for wrongful foreclosure; and 4) the Malabes’ claim should have been raised as a defense to the foreclosure action and not as an affirmative cause of action. The Malabes argued that Executive Centre did not have a mortgage with a power of sale as required by Part I and therefore had no right to utilize the nonjudicial foreclosure procedures set forth in Part I. The Malabes also argued that wrongful foreclosure is a valid claim that may be raised as an affirmative claim and that the time period for filing their UDAP claim was equitably tolled based on their theory that the association fraudulently concealed that it lacked the ability to foreclose under Part I. The circuit court ruled in favor of Executive Centre and dismissed the complaint.

Sakal - Circuit Court Proceedings. In 2012, the Association of Apartment Owners of Hawaiian Monarch (“Hawaiian Monarch”) conducted a nonjudicial foreclosure against a unit owned by Christian Sakal (“Sakal”). In his opening brief before the ICA, Sakal argued that the nonjudicial foreclosure was under Part VI of HRS Chapter 667, but there appeared to be confusion in the appellate court decisions as to whether Hawaiian Monarch foreclosed under Part II or Part VI. The confusion appears to be related to the fact that Hawaiian Monarch initially recorded a notice of default and intention to foreclose citing to a statute B.

found in Part II, but later recorded an amended notice of default and intention to foreclose citing to provisions found in the new Part VI, which took effect after the recording of the initial notice of default and intention to foreclose but prior to the foreclosure sale. Four days prior to the scheduled auction, Sakal filed a motion for preliminary injunction seeking to stay the sale of the property. The circuit court denied the motion on December 3, 2012, and the sale took place that same day. Defendant Jonah Scott Kogen (“Kogen”) purchased the property for $50,500. The following month, in January 2013, Hawaiian Monarch recorded an Affidavit of Nonjudicial Foreclosure Under Power of Sale (“Affidavit”) and a quitclaim deed in favor of Kogen (“Quitclaim Deed”) in the land court recording system. In April of 2013, Kogen filed an ejectment action against Sakal and in May of 2013, Kogen obtained a Judgment for Possession and Writ of Possession. A year later, in May 2014, Sakal filed a complaint against Hawaiian Monarch and Kogen for wrongful foreclosure, common law trespass, and to recover title to his unit, alleging that Hawaiian Monarch lacked a power of sale. Hawaiian Monarch and Kogen filed separate motions to dismiss under HRCP Rule 12(b)(6). Kogen argued that Sakal’s claims for relief were untimely because Sakal did not challenge the validity of the foreclosure proceedings prior to the date of the recordation of the Affidavit and Quitclaim Deed as required by HRS § 667-102(b). Kogen also argued that Sakal’s claims were barred by HRS § 667-60(c) because Sakal failed to file his action within sixty days following the recordation of the Affidavit and Quitclaim Deed. Hawaiian Monarch’s arguments mirrored those of Kogen. The circuit court granted Kogen’s and Hawaiian Monarch’s motions to dismiss, finding that HRS § 667-102(b)(2) was applicable and precluded Sakal from challenging title.

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IV. The Decisions of the Hawaii Intermediate Court of Appeals. A. The ICA’s Decision in ICA Sakal. On July 26, 2018, the ICA rendered its decision in ICA Sakal holding that before a condominium association may foreclose nonjudicially on a condominium unit, it must have a power of sale provision in its bylaws or another enforceable agreement with the owner. See supra note 1. Finding that neither the bylaws nor the statutes relied upon by Hawaiian Monarch contained a grant of a power of sale, the ICA ruled that Hawaiian Monarch was not authorized to use the nonjudicial foreclosure procedures found in HRS Chapter 667. Id. at 230, 426 P.3d at 454. The ICA thus determined that Sakal’s claim for wrongful foreclosure should not have been dismissed. Id. at 230 and 232, 426 P.3d at 454 and 456. The ICA relied upon the Hawaii Supreme Court’s determination in Santiago v. Tanaka, 137 Hawaii 137, 155, 336 P. 3d 612. 630 (2016), that “no Hawaii statute, including HRS chapter 667 provides mortgagees the right to proceed by nonjudicial foreclosure; rather HRS § 667-5 only allows for the creation of a power of sale, if the parties choose to do so within the four corners of a contract.” Id. at 225, 426 P.3d at 449. The ICA found that no provision of Part II or Part VI of HRS Chapter 667 establishes a power of sale or provides for any form of nonjudicial foreclosure in the absence of a power of sale. Id. The ICA also reviewed the legislative history of Chapter 667 and stated that it could not find any legislative purpose or intent to grant any class of persons or entities with a power of sale over the property of others. Id. The ICA also examined Act 182, which created Part VI of Chapter 667 and which established nonjudicial foreclosure procedures specifically for use by condominiums and planned community associations. The ICA concluded that there was nothing in the legislative history of Act 182 to suggest

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that it was ever contemplated that associations were to be given the authority to conduct power of sale foreclosures in the absence of an existing power of sale. Id. at 228, 426 P.3d at 452. The ICA likewise examined HRS § 514A-90 and HRS § 514B-146(a), which stated that the lien of an association may be foreclosed “by nonjudicial or power of sale foreclosure procedures set forth in chapter 667.” Id. The ICA concluded that “like HRS § 514A-90, HRS § 514B-146 does not authorize an association to conduct a nonjudicial or power of sale foreclosure other than as provided in HRS chapter 667, which does not authorize a nonjudicial or power of sale foreclosure absent a power of sale.” Id. The ICA stated that it would “not infer that the power to extrajudicially sell another person’s property was granted, in the absence of a clear legislative act doing so.” Id. at 227, 426 P.3d at 451. The ICA next examined the bylaws of Hawaiian Monarch, which provided that the association “shall have all remedies provided in Section 514A-90, HRS.” Id. at 229-230, 426 P.3d at 453-454. The ICA found that this language did not give Hawaiian Monarch a power of sale because HRS § 514A-90 and HRS § 514B-146 (which took effect after the bylaws were recorded) do not grant associations powers of sale over all condominium units, but only allow associations to utilize nonjudicial power of sale foreclosure procedures if they first have a power of sale provision in their governing documents. Id. at 230, 426 P.3d at 454. As to the issue of Sakal’s claim to recover title to the condominium unit, the ICA concluded that the language in HRS § 667-102(b), which provides that when both the affidavit and conveyance document have been recorded “all persons claiming by, through, or under the unit owner . . . shall be forever barred of and from any and all right, title, interest, and claims at law or in equity in and to the unit and every part of the unit, except

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as otherwise provided by law,” to be clear and unambiguous. Id. at 231, 426 P.3d at 455. The ICA found that Sakal failed to challenge the nonjudicial foreclosure prior to the recordation of the Affidavit and Quitclaim Deed and was therefore barred from reclaiming title to the unit. Id. at 231-232, 426 P.3d at 455-456. The ICA concluded, however, that this did not bar claims by Sakal for wrongful foreclosure and noted that the Hawaii Supreme Court had recently recognized a wrongful foreclosure claim arising out of an allegedly unlawful nonjudicial power of sale foreclosure in Hungate v. Law Office of David B. Rosen, 139 Hawaii 394, 402-04, 391 P.3d 1, 9-11 (2017). Id. at 232, 426 P.3d at 456. Accordingly, the ICA vacated the circuit court’s dismissal of Sakal’s claims against Hawaiian Monarch arising out of wrongful foreclosure and remanded the case for further proceedings.

when plaintiff discovers the violation.” Id. at 4. The ICA determined that the cause of action accrued on or about December 17, 2010, the date of the foreclosure sale, and thus found that, because the UDAP claim was filed on December 13, 2016, nearly six years after the cause of action accrued, the UDAP claim was time-barred under HRS § 480-24. Id. With respect to Malabes’ equitable tolling argument, the ICA noted that the Malabes were in essence alleging that Executive Centre, by virtue of its reliance on HRS § 667-5, fraudulently concealed the Malabes’ cause of action. Id. The ICA recognized that equitable tolling may apply to UDAP claims where there is a fraudulent concealment, but rejected the argument that reliance upon a statutory authority, even if that reliance later proves to be wrong, constitutes fraudulent concealment. Id.

B. The ICA’s Decision in ICA Malabe. On November 29, 2018, the ICA entered a summary disposition order in ICA Malabe. See supra note 2. On appeal, the Malabes argued that the circuit court erred in failing to recognize their claim that Executive Centre unlawfully foreclosed on their unit because it lacked a power of sale as required by Part I. See Malabe, SDO at 1. Executive Centre argued that it was authorized by HRS § 514B-146 to conduct a nonjudicial foreclosure under Part I without regard to a power of sale provision. Id. at 2. The ICA rejected Executive Centre’s argument that HRS § 514B-146 constitutes a legislative grant of authority to use the nonjudicial foreclosure procedures in HRS § 667-5, stating that this argument “disregards the plain language and legislative intent of both HRS § 667-5 and § 514B-146(a).” Id. The ICA held that HRS § 667-5 did not grant a power of sale, but instead “merely authorized use of certain nonjudicial procedures in order to effect a foreclosure only ‘[w]hen a power of sale [was] contained in a mortgage.’” Id. at 2. The ICA stated that the phrase “in like manner as a mortgage of real property” found in HRS § 514B-146 was intended to clarify that associations could avail themselves of the nonjudicial foreclosure procedures, but did not constitute a grant of a statutory power of sale. Id. Based on the foregoing, the ICA concluded that the Malabes stated a cognizable claim for wrongful foreclosure against Executive Centre and vacated the circuit court’s dismissal of the Malabes’ wrongful foreclosure claim. Id. at 3. As to the Malabes’ UDAP claim, Executive Centre argued that the claims were time-barred by HRS § 480-24 (2008) which provides that actions are barred unless commenced within four years after the cause of action accrues. Id. at 3. The ICA noted that it had previously recognized and adopted federal court rulings that “a cause of action for unlawful business practices accrues upon the occurrence of [an] alleged violation, rather than

V. Act 282.

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The decisions in ICA Sakal and ICA Malabe not only came as a surprise to condominium associations throughout the state, but also to the Hawaii legislature. In an effort to make clear its intent in adopting past legislation regarding the right of condominium associations to use the nonjudicial foreclosure procedures set forth in HRS Chapter 667 to foreclose their liens, the Hawaii legislature adopted legislation which became law on July 10, 2019, known as Act 282. See Act 282, §§ 1-9, at 779-83. In the preamble of Act 282, the Hawaii legislature made it clear that it disagreed with the ICA’s interpretation of its legislative intent. The legislature stated, among other things, that: 1) since 1999, condominium associations have been authorized to conduct nonjudicial foreclosures regardless of the presence or the absence of power of sale language in their governing documents; 2) Act 236 incorporated into the bylaws of all

O’CONNOR PLAYDON GUBEN & INOUYE LLP condominium associations a provision authorizing them to enforce their liens by nonjudicial or power of sale foreclosures pursuant to HRS Chapter 667; 3) the legislature disagrees with the ICA’s interpretation of its legislative intent as stated in ICA Sakal; and 4) Act 282 “confirms the legislative intent that condominium associations should be able to use nonjudicial foreclosure to collect delinquencies regardless of the presence or absence of power of sale language in an association’s governing documents.” Act 282, § 1, at 779-780. In Section 3 of Act 282, the legislature amended HRS § 514B-146(a) to expressly state that condominium associations may foreclose their liens “by nonjudicial or power of sale foreclosure, regardless of the presence or absence of power of sale language in an association’s governing documents[.]” Act 282, § 3, at 782. In Section 4 of Act 282, the legislature amended the definition of “power of sale” in HRS § 667-1 by adding a new subsection (2) to state: (2) For the purposes of part VI, an association enforces its claim of an association lien, regardless of whether the association documents provide for a power of sale, a power of sale foreclosure, a power of sale remedy, or a nonjudicial foreclosure. Act 282, § 4, at 782. Section 5 of Act 282 provides that Sections 3 and 4 “shall be applied retroactively to any case, action, proceeding, or claim arising out of a nonjudicial foreclosure” under Parts I, II, and VI of Chapter 667. Act 282, § 5, at 782. Act 282 became effective as of July 9, 2019, without the Governor’s signature. This was prior to the decisions of the Hawaii Supreme Court discussed below. VI. The Hawaii Supreme Court’s Decision in Malabe and Sakal. A. The Decision in Malabe. On June 17, 2020, the Hawaii Supreme Court rendered its decision in

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Malabe v. Ass’n of Apartment Owners of Exec. Ctr. by & through Bd. of Directors, 147 Hawaii 330, 465 P.3d 777 (2020). The decision was not unanimous on all issues. Justices McKenna, Pollack, and Wilson were in the majority. Justices Recktenwald and Nakayama dissented, in part. 1.

The Majority’s Opinion. a. Nonjudicial Foreclosures Under Part I. In Malabe, the Hawaii Supreme Court ruled that the ICA “correctly held that in order for an association to utilize the nonjudicial power of sale foreclosure procedures set forth in HRS Chapter 667, a power of sale in its favor must have existed in association bylaws or in another enforceable agreement with unit owners.” See Malabe, 147 Hawaii at 339, 465 P.3d at 786. The Court held that even though Executive Centre conducted its nonjudicial foreclosure pursuant to Part I and not Part II, as in Sakal, the result was the same. Id. at 339-340, 465 P.3d at 786787. The Hawaii Supreme Court agreed with the ICA’s analysis that HRS § 514A-90(a) and HRS § 514B-146(a) do not grant a power of sale, but only provide associations with access to nonjudicial power of sale procedures. Id. at 341, 465 P.3d at 788. The Court considered the issue of whether HRS § 514A-82(b)(13) supplied Executive Centre with a power of sale to foreclose nonjudicially. HRS § 514B-82(b)(13)

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incorporated into the bylaws of condominium associations existing as of January 1, 1988 and created thereafter, a provision stating that a lien created by HRS § 514A-90 “may be enforced by the association in any manner permitted by law, including nonjudicial or power of sale foreclosure procedures authorized by chapter 667.” Id. at 344-45, 465 P.3d at 791-92; see also HAW. REV. STAT. § 514A-82(b)(13) and last paragraph. The Court determined that this language did not create a power of sale, but instead only provided that a condominium lien “may be enforced” by nonjudicial or power of sale procedures authorized by chapter 667, where such action is “permitted by law.” Id. at 345, 465 P.3d at 792. The Court stated that this is a circular argument, because nonjudicial foreclosures were not “permitted by law.” Id. The Court next addressed Act 282. In determining whether the retroactive clause found in Section 5 applied, it first looked at Section 3 and Section 4. In addressing Section 3, the Court held that, “the plain language of the revisions to HRS § 514B-146(a)(2) limits the means by which condominium associations may foreclose on their liens” to three methods: “(1) ‘by action,’ (2) ‘by nonjudicial,’ or (3) ‘power of sale foreclosure, regardless of the presence or absence of power of sale language in an association’s governing documents.’” Id. at 352, 465 P. 3d at 799. The Court then stated that when Section 3 is read

together with the revisions to HRS § 667-1 found in Section 4, the result is the same and that the three methods by which condominium associations may foreclose their liens are: “(1) by judicial action, (2) by nonjudicial foreclosure when the mortgage contains a nonjudicial foreclosure or power of sale provision, or (3) by power of sale foreclosure, regardless of the presence or absence of power of sale language in an association’s governing documents.” Id. The Court held that for Act 282 to apply to the case, Executive Centre’s authority to nonjudicially foreclose under Part I must fall into one of the three methods of foreclosure. Id. The Court stated that the authority to foreclose did not fall under the first method because it was not a judicial foreclosure. Id. The Court stated that the authority did not fall under the third method because the nonjudicial foreclosure was not conducted pursuant to Part VI. Id. Accordingly, the Court held that in order for Section 5 (i.e., the retroactive clause) to apply to the facts of the case, Executive Centre’s authority to foreclose by nonjudicial foreclosure must fall under the second method, i.e., “by nonjudicial foreclosure when the mortgage contains a nonjudicial foreclosure of power of sale provision.” Id. The Court next examined HRS § 667-5 found in Part I of HRS Chapter 667 and held that, by its plain language, it applied only when a power of sale is contained in a mortgage, which is

the second means by which the court determined that an association may foreclose. Id. The Court stated that nothing in HRS § 514B-146 or its legislative history indicates that the legislature intended to provide “a blanket grant of powers of sale to all associations over all apartments/units within those associations” and thus concluded that Act 282 did nothing to amend the Part I requirement that the foreclosure be conducted pursuant to a mortgage containing a power of sale. Id. The Court thus concluded that Act 282 did not apply to the facts of the case. In reaching this conclusion, the Court noted that, “[a]rguably, Section 5 would not have stated that Act 282 ‘shall’ apply retroactively to condominium association foreclosures made under Part I if Act 282 has no practical effect on such foreclosures.” Id. The Court nonetheless held firm to its finding that Sections 3 and 4 were unambiguous and had no effect on Section 5. Id. The Court noted that its “foremost obligation was to ascertain and give effect to the intention of the legislature, which is to be obtained primarily from the language contained in the statute itself.” Id. at 352-353, 465 P.3d at 799-800. The Court next examined the preamble to Act 282. In reviewing the preamble, the Court noted its disfavor of legislative history written after the fact, stating “[s]ubsequent legislative history is a hazardous basis for inferring the intent of an earlier legislature after any passage of time.” Id. at 353, 465 P. 3d at 800.

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The Court found that nothing in the preamble or legislative history indicates that the purpose of Act 282 was to ensure that condominiums may foreclose under Part I without a mortgage. Id. The Court instead found that the “purpose of the legislature in enacting Act 282 . . . is to ensure that associations may conduct nonjudicial foreclosures under Part VI of HRS Chapter 667 regardless of the presence or absence of power of sale language in an association’s governing documents.” Id. at 354, 465 P. 3d at 801. The majority thus concluded that ICA Sakal was correctly decided. b. Constitutional Issues Related to Act 282. The Court took note of the fact that in April of 2020, the United States District Court for the District of Hawaii in Galima v. Association of Apartment Owners of Palm Court, 453 F.Supp.3d 1334 (D. Haw. 2020), held that Act 282 is unconstitutional because it violates the Contracts Clause of Article I, § 10 of the United States Constitution. Id. at 333, 355-356, 465 P. 3d at 780, 802803. The Court noted that the decision in Galima is not binding on the Hawaii state courts, but is nonetheless entitled to respectful consideration. Id. at 355, 465 P. 3d at 802. Ultimately, the Court declined to rule on the issue of whether the retroactive clause in Section 5 of Act 282 is constitutional because it concluded that it was not applicable to the facts of the case. The Court relied upon the doctrine of constitutional avoidance as the basis for the decision to leave the issue for another day. Id. c. The UDAP Claim. The Court considered the argument made by the Malabes that their UDAP claim was not time barred based on their assertion that Executive Centre fraudulently concealed the wrong that it was committing by implying, stating, or misrepresenting that it held a mortgage with a power of sale when it did not, or that it was authorized to foreclose under HRS § 667-5. Id. at 357-358, 465 P.3d at 804-805. The Court noted in footnote 36 that, despite the ICA’s ruling, the reason for the circuit court’s dis-

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missal of the UDAP claim was “unclear.” Id. at 354, 465 P.3d at 804, n.36. The Court ruled that, when considering Executive Centre’s HRCP Rule 12(b)(6) motion, the court “must accept the Malabes’ complaint allegations as true.” Id. at 357, 465 P.3d at 804. The Court applied the notice pleading standard and held that viewing the complaint most favorable to the Malabes, it could not be said that they could prove no set of facts in support of their claim that would entitle them to relief. Id. at 358, 465 P.3d at 805. On that basis, the Supreme Court vacated the circuit court’s dismissal of Count II of the Malabe’s complaint and the ICA’s judgment on appeal affirming the dismissal. 2.

The Dissent by Chief Justice Recktenwald, Joined by Justice Nakayama. Chief Justice Recktenwald wrote a dissenting opinion, which was joined by Justice Nakayama. Id. at 359, 465 P.3d at 806 (Recktenwald, C.J., dissenting). Chief Justice Recktenwald agreed with the majority’s conclusion that the nonjudicial foreclosure provisions found in Part I were not available to Executive Centre and that the circuit court erred in dismissing Malabes’ wrongful foreclosure claim, but he disagreed with the reliance by the majority on the ICA’s opinion in ICA Sakal. Id. He also disagreed with the majority on the issue of the Malabes’ UDAP claim. Id. a. The Dissent’s Position that ICA Sakal was Wrongly Decided. Chief Justice Recktenwald stated that he believes that ICA Sakal was wrongly decided because his interpretation of the law is that the statutory scheme governing foreclosures on liens by condominium associations permits a condominium association to proceed under Part II, regardless of whether its bylaws contain a power of sale. His analysis runs as follows: HRS Chapter 667 as it existed in 2010, when Executive Centre foreclosed on Malabes’ unit, contained two parts, i.e., Part I and Part II. HRS § 667-40, located in Part II of HRS Chapter 667, provided in 2010 (and still does) that a power of sale foreclosure may be used “in certain non-mortgage situations where a law or [a] written document contains, authorizes, permits, or provides for a power of sale, a power of sale foreclosure, a power of sale remedy, or a nonjudicial foreclosure.” Id. at 360, 465 P. 3d at 807. Chief Justice Recktenwald concluded that while a power of sale provision in the bylaws of a condominium association would be sufficient to authorize the association to

O’CONNOR PLAYDON GUBEN & INOUYE LLP foreclose nonjudicially under Part II, this was not required because HRS § 667-40 also allows for Part II foreclosures on liens if “a law . . . authorizes, permits, or provides for ... a power of sale foreclosure . . . or a nonjudicial foreclosure.” Id. Chief Justice Recktenwald determined that HRS § 514B-146(a) is such a law because at all relevant times during the litigation, it provided that the “lien of the association may be foreclosed by action or by nonjudicial or power of sale foreclosure procedures set forth in chapter 667 . . . in like manner as a mortgage of real property.” Id. (quoting HAW. REV. STAT. § 514B-146(a) (2006)). Chief Justice Recktenwald noted that the ICA “placed great weight on the word ‘procedures’ in HRS § 514B-146(a)” and construed this to mean that the legislature intended for condominium associations to be able to use Part II only if they also had a power of sale. Id. He found that this “restrictive reading” of the statute “ignores the plain language of HRS § 667-40, which only requires that the relevant law ‘authorizes, permits, or provides for . . . a power of sale . . . or nonjudicial foreclosure.’” Id. at 360, 465 P. 3d at 807. Chief Justice Recktenwald stated that, in his view, there is no other way to read the plain and obvious meaning of HRS § 514B-146(a) than to permit nonjudicial or power of sale foreclosures. Id. He went on to state that “to say that the word ‘procedure’ alters the import of HRS § 514B-146(a) ignores the very nature of what a foreclosure is - a means of enforcing a security interest by a certain set of procedures - and conflates the substantive right to foreclose with the means by which that right is enforced.” Id. at 362, 465 P. 3d at 809. While the ICA and the majority reasoned that “[i]f a law provided powers of sale to all associations, there would be no need to reference other written documents,” Chief Justice Recktenwald disagreed. Id. He explained that this interpretation “might be convincing” if

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HRS § 667-40 “only referenced written documents, but it does not.” Id. He pointed out that HRS § 667-40 explicitly contemplates that either a law or a written document may provide for power of sale foreclosures and that if the legislature had intended that only written documents could grant a power of sale, there would be no need to reference a law. Id. Finally, he noted that HRS § 667-40 is not limited to condominiums, but that it also covers agreements of sale and time share plans. Id. Thus, he concluded that the statute was written to cover situations in which either a law or a written document provides for power of sale foreclosures. Id. Chief Justice Recktenwald discussed the legislative history of HRS § 514A-90 and HRS § 514B-146(a) and concluded that the legislature intended for condominium associations “to be able to nonjudicially foreclose on their liens without any additional authorization from the bylaws.” Id. at 363, 465 P. 3d at 810. He noted that the prefatory section to Act 236 (1999) states: “[t]he legislature further finds that there is a need for clarification regarding the authority of associations of apartment owners to use non-judicial and power of sale foreclosure procedures to enforce liens for unpaid common expenses.” Id. at 363, 465 P. 3d at 810, citing Act 236, § 1 at 723. He also noted that the Conference Committee Report to the bill that became Act 236 noted that the measure was amended to “[a]llow[ ] associations to enforce liens created for delinquent maintenance fees, including non-judicial or power of sale foreclosure procedures[.]” Id. at 363, 465 P. 3d at 810, citing Conf. Comm. Rep. No. 43, in 1999 H. Journal, at 927. Chief Justice Recktenwald concluded that an association lien for unpaid fees is a creature of statute and that the methods by which an association lien may be enforced are, likewise, statutory. Id. He also concluded that “the text of HRS § 514A-90 (and now HRS § 514B-146), as well as its legislative history, evinces the legislature’s intent to allow an AOAO to enforce its lien by power of sale foreclosure” and that “[t]o impose an additional contractual requirement on a security interest that derives from statute departs from both the plain language and intention of the law.” Id. at 363, 465 P.3d at 810. While Chief Justice Recktenwald disagreed with the majority’s reliance upon ICA Sakal, he did agree that Part I nonjudicial foreclosure procedures were not available to Executive Centre because Part I was applicable only when a power of sale is contained in a mortgage. Id. at 363, 465 P.3d. at 810. He noted that only Part II provided for nonjudicial foreclosures in “certain non-mortgage situations.” Id. at 364, 465 P.3d at 811. b. The Dissent on the Issue of Act 282. Chief Justice Recktenwald addressed the majority’s analysis of Act 282. He discussed the majority’s finding that the plain language of the revisions to HRS § 514B-146(a)(2) limits condominium association foreclosures to three types: (1) “by action,” (2)

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“by nonjudicial,” or (3) “power of sale foreclosure, regardless of the presence or absence of power of sale language in an association’s governing documents.” Id. at 364, 465 P.3d at 811. He disagreed with this analysis, noting that “nonjudicial foreclosure” and “power of sale foreclosure” have the same meaning and pointed out that even the ICA agreed. Id. He therefore concluded that it cannot be the case that the word “or” between the words “nonjudicial” and “power of sale” as used in Act 282 in amending HRS § 514B-146(a) created a list with three distinct foreclosure options, but instead, “the word ‘or’ simply reiterates what HRS § 667-1 already makes clear - that the two terms refer to the same concept.” Id. Chief Justice Recktenwald therefore concluded that HRS § 514B-146(a), as amended by Act 282, gives condominium associations “two paths to foreclose on their liens: (1) by judicial action or (2) by nonjudicial foreclosure, which is also called power of sale foreclosure, regardless of the presence or absence of power of sale language in an association’s governing documents.” Id. Chief Justice Recktenwald also disagreed with the majority that the language in Act 282 which would allow a condominium association to foreclose nonjudicially regardless of the presence or absence of power of sale language in the association’s governing documents was limited to foreclosures under Part VI because HRS § 667-40 explicitly contemplates that condominiums may proceed under Part II. Id. Finally, despite his disagreement with the majority’s reliance upon the analysis in ICA Sakal, Chief Justice Recktenwald agreed with the majority’s conclusion that Act 282 did not aid Executive Centre because Executive Centre relied upon Part I. He found that nothing in the relevant statutes contained in Act 282 altered the analysis of the statutory scheme enumerated in the Malabe opinion. Id. at 365, 465 P.3d at 812. c. The Dissent Regarding the UDAP Claim. Chief Justice Recktenwald stated that he agreed with the ICA that the Malabe’s UDAP claim was barred by the four-year statute of limitations. Id. at 365, 465 P.3d at 811. He stated that he would affirm the ICA’s holding that “reliance on a statute that a court later determines to be unavailable does not suffice to toll the statute of limitations.” Id. B. The Decision in Sakal. The day after it rendered its decision in Malabe, the Hawaii Supreme Court rendered its decision in Sakal v. Association of Apartment Owners of Hawaiian Monarch, 148 Hawaii 1, 466 P.3d 399 (2020). Sakal was limited to whether Sakal’s claims to recover title to the unit were barred by HRS § 667-102(b)(2) and whether the sixty-day time limit of HRS § 667-60(c) was applicable to the claim for wrongful foreclosure. The decision in Sakal was split 3 to 2, with Justices Pollack, McKenna, and Wilson in

the majority and Chief Justice Recktenwald and Justice Nakayama in the minority. 1. The Majority’s Opinion. The Hawaii Supreme Court first considered whether Sakal’s claims were barred by HRS § 667-102(b)(2) which provides that when both an affidavit and conveyance document have been recorded, “[a]ll persons claiming by, through, or under the unit owner . . . shall be forever barred of and from any and all right, title, interest, and claims at law or in equity in and to the unit and every part of the unit, except as otherwise provided by law[.]” Id. at 6-7, 466 P.3d at 404-405; see also HRS § 667-102(b)(2). The Hawaii Supreme Court held that the plain meaning of the phrase “persons claiming by, through, or under the unit owner” does not include the unit owner. Sakal, 148 Hawaii at 6, 466 P.3d 404. As a result, the Court ruled that the ICA erred in determining that HRS § 667-102(b)(2) operated to bar Sakal from seeking recovery of the property. Id. at 7, 466 P.3d 405. Next, the Court addressed the issue of whether Sakal’s claim to regain title was barred by HRS § 667-60(c), which imposes a 60-day time limit from the date an affidavit of sale is recorded for an owner to challenge a nonjudicial foreclosure sale conducted pursuant to Part II of Chapter 667. Id. at 7-9, 466 P.3d at 405-407. The Court noted that by its plain language, the sixty-day time limit found in HRS § 667-60(c) is “only applicable when there is a valid power of sale” and that “it does not apply when a foreclosing party is alleged to have conducted a foreclosure without a power of sale.” Id. at 8, 466 P.3d at 406. The Court stated that “[a] claim based on a lack of a power of sale is markedly different in nature” and not governed by HRS § 667-60(c). Id. at 8-9, 466 P.3d at 406-407. The Court noted that Sakal’s claim was not based on a violation of the foreclosure procedures set forth in HRS Chapter 667, but instead was based on the absence of a power

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of sale. The Court therefore held that Sakal’s claim was not based on statutory law, but on common law and HRS § 667-60(c) did not apply. Id. at 9, 466 P.3d at 407. The Court left open several issues related to Sakal’s claim seeking to recover title. In footnote 14, the Supreme Court noted that even though it concluded that Sakal was not barred from seeking title to the property, “in cases of wrongful foreclosure, a court has the ‘power to fashion an equitable relief ’ because wrongful foreclosure is a proceeding that is equitable in nature.” Id. at 9, 466 P.3d at 407 n.14. The Court also stated “[t]his court has left open the question of whether, in light of the detailed statutory scheme governing the registration and issuance of certificates of title in the land court system, the equitable protections for good faith purchasers that were recognized in Santiago are available with respect to registered property.” Id. The Court declined to consider whether Sakal’s request for equitable relief, seeking the restoration of title to the unit, was subject to an equitable defense because Kogen had not yet filed an answer. Id. These issues will therefore likely be addressed on remand. 2. The Dissent by Chief Justice Recktenwald, Joined by Justice Nakayama. Just as he did in Malabe, Chief Justice Recktenwald explained that, in his opinion, “an AOAO does not need a power of sale in its bylaws or in another written document to utilize power of sale foreclosure under HRS § 667-21 et seq. because a law, HRS § 514B-146(a) (2006), supplies the authority for the AOAO to do so.” Id. at 10, 466 P.3d at 408 (Recktenwald, C.J., dissenting). In footnote 3 he stated that “Act 282 made clear that an AOAO could foreclose under Part II or Part VI ‘regardless of the presence or absence of power of sale language in an association’s governing documents.’” Id. at 10, 466 P.3d at 408 n.3. He thus concluded that “if the AOAO foreclosed under Part II, it could do so regardless of whether the AOAO’s bylaws provided for a power of sale.” Id. at 10, 466 P.3d at 408. Chief Justice Recktenwald agreed with the majority’s interpretation of HRS § 667-102, but disagreed with the majority’s analysis of HRS § 667-60(c), which he believes rests on an incorrect premise (i.e., that Hawaiian Monarch was not authorized to conduct a nonjudicial foreclosure under Part II). Id. at 10, 466 P.3d at 408 and n.4. He stated that he “would hold that HRS § 667-60(c) may bar Sakal’s claim if the AOAO employed Part II.” Id. at 10, 466 P.3d at 408. VII. What Does This All Mean for Condominiums Going Forward? While some issues have been decided, others remain open. For example, the Hawaii Supreme Court has left open the

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issue of whether the retroactive clause found in Act 282 is constitutional as applied to nonjudicial foreclosures under Parts II and VI. Although Judge Kobayashi ruled in Galima that Act 282 violates the contracts clause, the Hawaii Supreme Court clearly stated that, while the decision in Galima is entitled to respectful consideration, it is not binding on the Hawaii state courts. Accordingly, it is entirely possible that, when faced with the issue, the Hawaii Supreme Court will find Act 282 to be constitutional. Additionally, given the fact that the Supreme Court decisions in Malabe and Sakal were split, and Justice Pollack has since retired, it is entirely possible that there will be a change in direction. With regard to the issue of equitable tolling and the right of an owner to recover title after an unauthorized nonjudicial foreclosure, the Hawaii Supreme Court left those issues open when it remanded both cases to the circuit court. Those issues will undoubtedly be the subject of further litigation. Finally, Act 282 amended HRS § 514B-146 and HRS § 667-1 to expressly state that associations may foreclose nonjudicially “regardless of the presence or absence of power of sale language in an association’s governing documents.” While there should be no doubt as to the plain meaning of these clear and unambiguous words, the decisions in Sakal and Malabe provide a reminder to associations and practitioners that the judiciary is the ultimate authority for the interpretation of laws and that one can never, with absolute certainty, predict the outcome of judicial decisions. _________________________ 1 See Sakal v. Ass’n of Apartment Owners of Hawaiian Monarch, 143 Hawaii 219, 426 P.3d 443 (App. 2018). 2 See Malabe v. Ass’n of Apartment Owners of Exec. Ctr. by & through Bd. of Directors, CAAP-17-0000145, 143 Hawaii 331, 430 P.3d 892 (App. 2018) (“SDO”). 3 HRS Chapter 514A was repealed effective January 1, 2019 pursuant to 2017 Haw. Sess. Laws Act 181, § 2, at 629. 4 See Conf. Comm. Rep. No. 133 (2011) (https://www.capitol.hawaii.gov/session2011/commreports/SB651_CD1_CCR133_.HTM).

M. Anne Anderson is a partner, and Paul Ireland Koftinow is an associate, in the law firm of Anderson & Fujisaki LLP A Limited Liability Law Partnership. They are actively involved in the representation of community associations. Ms. Anderson and Mr. Koftinow were authors, along with John Morris of Ekimoto & Morris LLC, of amicus briefs filed with the Hawaii Supreme Court in Malabe and Sakal in support of the positions taken by the condominium associations. They also advocated for the passage of the bill that became Act 282 (2019).

HSBA HAPPENINGS Run for the 2022 HSBA Board The HSBA Nominating Committee seeks candidates to run in the next HSBA Board election. The following officer positions (one-year term) will be available beginning January 2022: Vice President, Treasurer, and Secretary. The following director positions (two-year term) will be available: five for Oahu, one for Kauai, and one for West Hawaii. The HSBA/ABA Delegate position will also be available. If interested, email a cover letter and resume to the Nominating Committee (nominations@hsba.org) by April 16. The Committee will have a slate ready by the end of May and discourages any campaigning before that time.

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sition on its Board for a 3-year term beginning August 1, 2021. Qualifications for the position include being willing and able to devote time to perform necessary duties; and conscientious, studious, thorough, and diligent in learning methods and problems of the organization. Duties of the CSR Board include examining applicants for certification as Hawaii certified shorthand reporters and proposing rules and regulations for: (1) testing, licensing, and supervision of certified shorthand reporters, (2) standards governing conduct of Hawaii certified shorthand reporters, and (3) discipline, censure, suspension, or revocation of certification. Anyone interested in serving in this capacity should submit a resume, including their area of concentration, and a reason for wanting to serve no later than March 31 to the HSBA Nominating Committee at nominations@hsba.org or at 1100 Alakea Street, Suite 1000, Hon-

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CAS E NOTES Supreme Court Criminal Arraiza v. State, No. SCWC-170000695, January 26, 2021, (Recktenwald, C.J.). Araiza is a citizen of Mexico and a lawful permanent resident of the United States. In 2014, Araiza pleaded no contest in the circuit court to Theft in the First Degree, an aggravated felony under federal immigration law, and to Welfare Fraud. Her attorney advised her that pleading no contest would make deportation “almost certain,” but that “[his office] had criminal defendants who were convicted of felonies who are not automatically deported” because immigration was “handled by federal authorities who do not oversee state courts.” The Hawaii Supreme Court was asked to determine whether counsel properly advised his client about the consequences of an aggravated felony conviction. The Hawaii Supreme Court held he did not. To be effective under the United States and Hawaii Constitutions, criminal defense attorneys must advise their clients about adverse immigration consequences that may result from a plea of guilty or no contest. Haw. Const. art. I, § 14; Padilla v. Kentucky, 559 U.S. 356, 368 (2010). Despite her attorney’s reference to deportation being “almost certain,” when taken as a whole, his advice conveyed that there was a realistic possibility Araiza would not be deported. State v. Albion, No. SCWC-180000600, December 29, 2020, (McKenna, J.). The Hawaii Supreme Court addressed whether a defendant whose substance use resulted in 22 March 2021

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Appeal Pointer In circuit court agency appeals, the order disposing of the appeal is not appealable unless it is reduced to a separate judgment. HRCP 72(k); Jenkins v. Cades Schutte Fleming & Wright, 76 Hawai`i 115, 869 P.2d 1334 (1994). permanent psychosis was prohibited by the self-induced intoxication exception from presenting evidence relevant to the lack of penal responsibility defense. The issue arose from the jury conviction of Ramoncito Abion (“Abion”) on one count of assault in the second degree (“assault second”) in the circuit court. After Abion was arrested and charged with assault second, a panel of three medical examiners deemed Abion fit for trial. One of the examiners, Dr. Martin Blinder (“Dr. Blinder”), however, opined that Abion suffered from amphetamine psychosis and might be entitled to a lack of penal responsibility defense. Before trial, the State filed a motion for a finding of inadmissibility of the Haw. Rev. Stat. § 704-400 defense (“motion for inadmissibility”), seeking to preclude Dr. Blinder from testifying at trial. The circuit court precluded Dr. Blinder from testifying on the grounds that State v. Young, 93 Hawaii 224, 999 P.2d 230 (2000), had determined a drug-induced mental illness was self-induced intoxication prohibited as a defense by Haw. Rev. Stat. § 702-230(1) (Supp. 2015). Abion was convicted of assault second and the ICA affirmed. Abion’s application for writ of certiorari raised the following question: Did the ICA gravely err by tolerating the trial court’s exclusion of

Abion’s only witness, violating his Due Process right to present evidence in support of his defense, and undermining the jury’s exclusive task to resolve ultimate issues of fact? The Hawaii Supreme Court held that, based on the language and legislative history of Haw. Rev. Stat. § 702-230, the self-induced intoxication exception of Haw. Rev. Stat. § 702-230(1) applied only when a defendant was under the temporary influence of voluntarily ingested substances at the time of an act. Stanley v. State, No. SCWC-180000141, January 5, 2021, (McKenna, J.). Edward G. Stanley (“Stanley”), pro se, appealed the circuit court denial of his second Haw. R. Penal P. Rule 40 petition for post-conviction relief (“Second Petition”). Stanley’s Second Petition arose from a March 16, 1988 conviction. A jury convicted Stanley of two counts of first degree reckless endangering, as lesser included offenses of attempted first degree murder (Counts I and II); one count of attempted first degree murder (Count III); one count of attempted manslaughter, as a lesser included offense of attempted second degree murder (Count V); and one count of place to keep firearm (Count VI). In 1989, Stanley’s direct appeal from his 1988 convictions was rejected by the Hawaii Supreme Court. His first Haw. R. Penal P. Rule 40 petition (“First Petition”) in 1992, alleging different grounds than those contained in the Second Petition, was rejected by the Hawaii Supreme Court. His 2001 Haw. R. Penal P. Rule 35 motion was also denied by the circuit court, from which he did not appeal. Thereafter, Stanley filed the subject

Second Petition in 2017, in which he alleged, in relevant part, that his conviction of attempted manslaughter in Count V was based on reckless conduct, and therefore, his sentence was illegal, citing to State v. Pinero, 70 Haw. 509, 778 P.2d 704 (1989), State v. Holbron, 80 Hawaii 27, 904 P.2d 912 (1995), reconsideration denied, 80 Hawaii 187, 907 P.2d 773 (1995), and State v. Loa, 83 Hawaii 335, 926 P.2d 1258 (1996), which held that because the only nonexculpatory circumstance legally capable of mitigating murder to manslaughter is the mitigation of extreme mental or emotional disturbance for which there is a reasonable explanation (“EMED”), there is no offense of attempted involuntary manslaughter based on reckless conduct (“attempted reckless manslaughter”). The circuit court denied Stanley’s Second Petition without an evidentiary hearing. Stanley appealed the denial of the Second Petition to the ICA. In its SDO, the ICA affirmed the circuit court’s denial of the Second Petition. The ICA ruled, inter alia, that Stanley failed to demonstrate he was convicted of attempted reckless manslaughter, thereby failing to state a colorable claim that his sentence for Count V was illegal. The ICA also ruled Stanley was not entitled to relief under Haw. R. Penal P. Rule 40 based on the equal protection claim alleged on appeal because he had not raised the issue before the circuit court in the Second Petition and failed to prove the existence of extraordinary circumstances justifying his failure to raise that claim. The Hawaii Supreme Court held the ICA erred in affirming the circuit court’s ruling that Stanley failed to state a colorable claim that he was convicted of at-

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tempted reckless manslaughter in his Second Petition.

Foreclosure Wilmington Savings Fund Soc. FSB v. Ryan, No. 18-0000071, January 14, 2021, (McKenna, J.). This certiorari proceeding arose out of an appeal from a foreclosure judgment. In their certiorari application, Terrence Ryan (“Terrence”) and Lucille Ryan (“Lucille”) (collectively, “the Ryans”) presented the following question: Did the ICA commit grave errors of law and/or fail to reconcile obvious inconsistencies in its decision with those of the Hawaii Supreme Court when the ICA concluded that the circuit court did not abuse its discretion by denying the moving party’s motion to extend time to file notice of appeal where the moving party affirmatively inquired directly with the circuit court about when the order was filed, and the circuit court staff provided incorrect information to the moving party leading the moving party to believe that the thirty days to file the notice of appeal had not yet begun tolling? The Hawaii Supreme Court held as follows: (1) Hawaii Rules of Appellate Procedure Rule 4(a)(4)(B) motions to extend time for filing a notice of appeal are not properly filed as ex parte motions; (2) the Rules of the Circuit Courts of the State of Hawaii Rule 7.2(g)(5)(A) provision purportedly disallowing appellate review of decisions on motions to advance hearings is inapplicable to decisions on Haw. R. App. P. Rule 4(a)(4)(B) motions, pursuant to Haw. R. App. P. Rule 2.1(a) (2010); (3) under the circumstances of this case, the Ryans’ motion to advance the hearing on their February 2, 2018 Haw. R. App. P. Rule 4(a)(4)(B) hearing motion should have been granted; (4) the

Ryans established “excusable neglect,” and their Haw. R. App. P. Rule 4(a)(4)(B) hearing motion should have been granted; and (5) thus, the Ryans’ February 6, 2018 notice of appeal was effective as to all issues on appeal over which the ICA has appellate jurisdiction based on the Ryans’ timely appeal of the December 8, 2017 order denying reconsideration of the order granting summary judgment and foreclosure judgment.

Labor Porter v. Queens Med. Ctr., No. SCWC16-0000602, January 19, 2021, (Wilson, J.). The issue before the Hawaii Supreme Court arose from the Labor and Industrial Relations Appeal Board’s (“LIRAB”) denial of Porter’s request to reopen her claims pursuant to Haw. Rev. Stat. § 386-89, and the ICA’s affirmance of the denial. Porter argued that it was a mistake for the Director to deny her claims based on his conclusion that “[s]ince there is no such injury as multiple chemical sensitivity, there is no injury per se.” The LIRAB majority determined that Porter failed to produce “substantial evidence” of a mistake to support her Haw. Rev. Stat. § 386-89(c) request for reopening. Porter challenged the ICA’s affirmance of the LIRAB majority’s determination that she failed to produce substantial evidence to support her allegations of a mistake of fact related to the Director’s determination that she had not suffered a compensable illness because Multiple Chemical Sensitivity (“MCS”) is not an “injury per se.” Porter also argued that it was a mistake for her claim to have been decided on the question of whether MCS is a legitimate diagnosis, rather than on the question of whether her injury—described as MCS or otherwise—was work related.

It doesn’t have to get ugly. The LIRAB majority’s conclusion that Porter failed to present substantial evidence of a mistake in the determination of a fact was based on its finding that Porter “offered no new credible or reliable evidence that that [sic] MCS is, was, or has become an accepted medical diagnosis or a valid medical disorder.” The LIRAB’s and subsequently the ICA’s characterization of the basis for Porter’s allegations of mistake was artificially narrow. Watanabe v. Administrative Director of the Cts., No. SCWC-16-0000368, January 8, 2021, (Nakayama, J.). Watanabe was employed as a carpenter for the State of Hawaii (the “State”) and applied for service-connected disability retirement benefits after suffering a back injury. Following various administrative proceedings, Employees’ Retirement System, State of Hawaii (“ERS”) issued a proposed decision on October 11, 2011 denying Watanabe’s application on the merits and notifying Watanabe that the decision would become final unless Watanabe filed exceptions within fifteen days. On October 26, 2011, ERS received a document filed by Watanabe entitled “Petitioner’s Proposed Decision,” which was a copy of ERS’ own proposed decision with multiple underscored insertions and a single “lined out” paragraph. This case centered on whether the document filed by Watanabe – Petitioner’s Proposed Decision – constituted exceptions. Almost two years after Watanabe’s filing, ERS contacted Watanabe to schedule an exceptions hearing, but reserved the issue of whether Watanabe’s filing actually constituted exceptions. Following the

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C O URT BR IEF S Adoptions More Joyful Despite COVID-19

Partner agencies created cardboard cutouts of Judge Darien Ching Nagata (above) and Judge Jeffrey Hawk (above right) so they could be part of the photos commemorating the adoption and guardianship celebrations. In a year when staying within your bubble and social distancing were the norm, adoption celebrations became more joyful because they could be shared with family, friends, and classmates in multiple locations, thanks to Zoom. The Third Circuit Hilo Family Court celebrated National Adoption Day in late November by having 29 children achieve

permanency by being adopted or placed into guardianships. “Usually, the families gather in our courtroom for the adoption ceremony with their immediate family and representatives from the various agencies,” said District Family Judge Darien Ching Nagata. “This year, the proceedings were held virtually, which turned out to be a blessing in disguise. “One child had seven classmates and two teachers appear virtually to support her during her guardianship hearing. An-

other child had more than 20 family and friends watch from multiple locations to be a part of this special day,” added Judge Ching Nagata, who appeared remotely from her courtroom. This is the third year the Third Circuit has collaborated with the Department of Human Services, the Department of the Attorney General, Children’s Law Project of Hawaii, and P.A.R.E.N.T.S. Inc. to finalize adoptions and guardianships in conjunction with National Adoption Day. “District Family Judge Jeffrey Hawk and I were honored to preside over these adoptions and guardianship hearings,” said Judge Ching Nagata. “Just seeing the joy in everyone’s eyes and hearing the emotion in their voices made my day!” Judge Ching Nagata added that granting an adoption or guardianship for a child, means they will now be in a stable, permanent home with a loving family. “We call them their Forever Family,” she said.

Per Diem Judge Freitas Reappointed DEPUTY PROSECUTING ATTORNEY

The County of Maui, Department of the Prosecuting Attorney, seeks to fill position(s) at the entry to high experience level(s) as a Deputy Prosecuting Attorney. Applicants must have an active Hawaii State Bar license and be in good standing before the Hawaii Supreme Court, have strong oral and written communication skills, and legal research abilities. Applicants should possess excellent analytical ability, good judgment, and the ability to work in a supportive and professional manner with other attorneys, support staff, outside agencies and community. Competitive salary commensurate with years of experience ranging from $66,000 to $130,000. Excellent benefit package and work environment. Please send letter of interest, resume, application form (website listed below), waiver form, writing sample, and three references to: Andrew H. Martin, Acting Prosecuting Attorney Department of the Prosecuting Attorney County of Maui 150 South High Street Wailuku, Maui, Hawaii 96793 E-mail: Prosecuting.Attorney@co.maui.hi.us Website: https://www.mauicounty.gov/123/Prosecuting-Attorney The County of Maui is an Equal Opportunity Employer

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Harry P. Freitas was recently reappointed as per diem judge of the District Court of the Third Circuit. He is also designated as per diem district family judge of the District Family Court of the Third Circuit. His term will be from January 16, 2021 to January 15, 2025.

Hawaii State Judiciary 2020 Annual Reports Available Online Annual reports issued by the Hawaii State Judiciary for 2020 are available for online viewing and download. Visit www.courts.state.hi.us and click News and Reports » Reports. Available documents include current and past reports to the Legislature, annual statistical supplements, reports of the Commission on Judicial Conduct, judicial performance review reports, judicial financial disclosure statements, and various initiatives, including the Hawaii Mental Health Core Steering Committee Joint Report of January 2020.

CASE NOTES (Continued from page 25) hearing, the ERS Board issued a final decision concluding that Watanabe’s filing did not constitute exceptions and confirming its denial of his application. Watanabe appealed to the circuit court, arguing both the merits of his disability claim and that the ERS Board’s proposed decision did not automatically become a final decision because Watanabe had timely filed exceptions. The circuit court affirmed the ERS Board’s decision without ruling on whether Watanabe’s filing constituted exceptions. Watanabe appealed to the ICA. The ICA held that Petitioner’s Proposed Decision did not constitute exceptions and affirmed the circuit court’s decision. In his application for writ of certiorari, Watanabe maintained that Petitioner’s Proposed Decision filing constituted exceptions and that the ICA and ERS misinterpreted the administrative rule to require a rigid format for exceptions, thus denying Watanabe a meaningful opportunity to be heard. To resolve this case, the Hawaii Supreme Court considered what level of formality Hawaii Administrative Rules § 6-23-19 required for exceptions. Watanabe met the minimum requirements for exceptions because he: (1) filed within fifteen days of the agency’s proposed decision; (2) specified his points of exception by either striking through, or, inserting underscored text in the agency’s proposed decision; and (3) for several of the points, cited to exhibits in the record. Having timely filed his exceptions, Watanabe was entitled to present argument on his exceptions to the ERS Board and to have the Board consider the merits of his exceptions.

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HSBA (Continued from page 21)

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Solutions Start Here Specializing In Resolving Your Challenging Civil Cases For 35 years, Chuck Crumpton has offered quick and flexible mediation and arbitration scheduling customized to your needs, utilizing not only in-person meetings, but videoconference and online platforms as well. Take advantage of personally tailored mediation and arbitration processes so that you receive cost-effective, innovative, fair and durable resolutions for your clients. Through dialogue focused not only on the legal and factual issues, but also the underlying human concerns and values, Chuck works with you to craft creative, practical, and sustainable solutions that are based on respect and understanding of the parties’ best interests and values, so that they can move forward unburdened by legal disputes. If you have a particularly complex, multi-party case, Chuck offers co-mediation at blended rates with top neutrals.

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Mass Mutual – Disability Insurance As a member of the Hawaii State Bar Association, you have access to wide-ranging income replacement solutions at discounted rates from one of the industry’s leading benefits providers – MassMutual. MassMutual is an approved HSBA Member-Only Benefits Provider. Please contact Glennel W. Jordan at gjordan@summitfinancialhawaii.com or (808) 219-7398 for more information. Verizon Wireless Receive significant discounts on wireless calling plans, as well as other discounts on accessories, devices, smartphones and text message plans. Eligibility requirements apply. Visit https://bit.ly/2XYWYjO to find out more and to enroll. Visit https://hsba.org/memberbenefits for more information on the more than 70 member benefits available.

NOTICE OF DISCIPLINE On December 11, 2020 the Disciplinary Board filed a consolidated report with the Hawai’i Supreme Court recommending disbarment of Respondent Christopher S.B. Woo for multiple acts of misconduct with multiple clients. The Hawaii Supreme Court first found that Respondent Woo was given proper notice of the disciplinary allegations against him and an adequate opportunity to respond but did not. Default was entered against him, and default proceedings were properly entertained by the Disciplinary Board. Following a de novo review, the court found that in ODC Case No. 17O-222, Woo failed, over the course of four months, to provide competent legal services as promised to his client, before the expiration of their credit-counseling certificate, despite their repeat inquiries, in violation of HRPC Rules 1.1, 1.3, 1.4(a), 1.4(b) and 3.2, and then withdrew from the representation without proper consultation, in violation of HRPC Rules 1.16(c) and 1.16(d), thereby causing them injury (being the loss of their $1,615.00 retainer paid to his firm and the garnishment of $1,437.00 in wages due to his inaction on their petition). Woo then failed to comply with disciplinary orders entered in the U.S. Bankruptcy Court regarding his representation of the same clients, in violation of HRPC Rule 3.4(e). Woo also misrepresented the truth, in violation of HRPC Rule 8.4(c), when he informed the Office of Disciplinary Counsel (ODC) that the U.S. Bankruptcy Court’s disciplinary sanctions had been reduced, based in part on the purported fact that he had signed a settlement with the court, and based in part on the purported fact the investigation into his conduct was found to be flawed, when neither assertion was true. In ODC Case No. 19-0276, Woo

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repeatedly failed to appear in court on behalf of his client, in violation of HRPC Rules 1.1, 1.3, 3.2, and 3.4(e) and failed to appear in court as ordered to explain his conduct, in violation of HRPC Rule 3.4(e). He engaged in deceitful conduct, in violation of HRPC Rule 8.4(c), by informing an investigator from the Prosecutor’s Office that he would cooperate and accept personal service of an order to show cause but then avoided service thereafter, and then informed ODC he was unaware of any attempt of service of the order by the Prosecutor’s Office. In ODC Case No. 19-0249, Woo knowingly practiced law while administratively suspended, in violation of HRPC Rule 5.5, by filing materials on behalf of a client in a bankruptcy matter and by making representations on behalf of a client in a criminal matter. Woo also, when licensed, repeatedly failed to attend hearings on behalf of his client, ultimately necessitating his removal from the case and substitution by other counsel, in violation of HRPC Rules 1.1, 1.3, 1.16(c), 1.16(d), 3.2, and 3.4(e). In ODC Case No. 19-0410, Woo failed to visit, call, or otherwise communicate with his two clients in a criminal proceeding during the two-month period they were in custody, in violation of HRPC Rules 1.1, 1.2(a), 1.3, and 1.4(a), failed to attend a pre-trial hearing, in violation of HRPC Rules 1.3, 3.2, and 3.4(e), and failed to attend court hearings on his clients’ matter, including two trial calls, ultimately necessitating his removal from the representation, in violation of HRPC Rules 1.1, 1.3, 1.16(c), 1.16(d), 3.2, and 3.4(e). Woo also violated HRPC Rule 3.4(e) multiple times by failing to respond to orders to show cause, attend scheduled hearings on those orders, or to pay the subsequently imposed $250.00 sanction. Woo failed to cooperate with the

ODC’s lawful investigations into his conduct, in violation of HRPC Rule 8.4(g), and, in violation of HRPC Rule 8.4(c), misrepresented the truth to an ODC investigator when he informed her that he had responded to one of the complaints she was attempting to serve upon him, when he had not. In aggravation, the court found Woo committed multiple violations, engaged in bad faith obstruction of the disciplinary process, refused to accept the wrongful nature of his conduct, is indifferent to addressing or ameliorating the injuries he inflicted through his conduct, and has substantial experience in the practice of law. In mitigation, the court noted Woo’s prior unblemished disciplinary record. Following a review of the ABA Standards for Imposing Lawyer Sanctions, in particular Standards 4.41 and 6.62, and disciplinary precedent in this jurisdiction, in particular ODC v. Russell, SCAD-11-358 (May 23, 2011), ODC v. Collins, SCAD-15-709 (January 20, 2016), and ODC v. Kea, SCAD-13-135 (July 2, 2013), the court concluded a substantial period of suspension is warranted. The court then ordered Woo suspended from the practice of law for five years, which shall be effective upon entry of this order, in light of his current suspension, pursuant to Rule 2.12A of the Rules of the Supreme Court of the State of Hawai’i (RSCH). Woo was also ordered to pay restitution to clients harmed, and costs of these disciplinary proceedings. Case Information: ODC vs. CHRISTOPHER S.B. WOO, SCAD-20-0000754, January 21, 2021.

ATTORNEY WANTED ASHFORD + WRISTON, LLP seeks an attorney with two or more years of experience in real estate and transactional law. Qualified candidates will show an aptitude for communicating clearly with clients and others, take pride in the quality of their written work-product and feel comfortable working independently or as part of a team. Requirements: Licensed to practice law in Hawaii; 2-7 years transactional experience. Interested applicants can email resume to: kkam@awlaw.com. ASSOCIATE ATTORNEY (Civil Litigation) Established downtown law firm is seeking a litigation associate attorney. 3-6 years civil litigation experience preferred; Admission to Hawaii Bar Required. Excellent benefits; Salary commensurate with experience. Please submit resume and writing samples in confidence to: Recruiting Committee/HR Case Lombardi & Pettit, A Law Corporation 737 Bishop Street, Suite 2600 Honolulu, HI 96813 Email: recruitingdirector@caselombardi.com BOUTIQUE ESTATE PLANNING firm is looking for an associate attorney who is passionate about helping clients with their estate planning needs. The ideal candidate will have experience in a large law firm’s litigation and/or transactional practice, as well as clerking experience with a probate judge or experience with a seasoned estate planning attorney here in Hawaii or on the Mainland. We are looking for someone who is looking to the future and is willing to take on a leadership role. Please mail resumes to: OES, 1050 Bishop Street, Ste. 483, Honolulu, Hawaii 96813. Serious inquiries only, and please feel free to add personal statements about yourself, your goals and your interests.

EXCELLENT OPPORTUNITY for family law attorney with substantial experience to join established family law department in large firm, with mentoring and case referral benefits. Join as counsel or on partner track. Firm provides all administrative services. Please submit your resume to ptomar@ awlaw.com MAUI LAW FIRM Cain & Herren, ALC, is looking to add attorneys for one full-time legal position inits Civil Litigation and Estate Planning and Probate Department. We are one of the largest law firms in Maui County, Hawai’i and practice Family, Criminal Defense, Civil Litigation, Estate Planning/Probate and Bankruptcy /Foreclosure Defense Law. Interested applicants should send their resume and cover letter to cindy@cainandherren.com. Here we grow again! O’CONNOR PLAYDON GUBEN & INOUYE LLP, is looking for an Associate Attorney in litigation. One year of litigation experience is desired. Must be licensed to practice in Hawaii. Salary is commensurate with experience. Benefits include: vacation/sick leave, medical, dental, vision, 401(k), parking, life and LTD insurance. gmp@opgilaw.com.

EXPERT WITNESS CONSTRUCTION, 30 yrs; P.E., MS/BS Civil Eng’g, CCM, CEP; excellent written/oral comm; utilities, road, bridge, treatment plant, pump station, transit, multi-story; claims, scheduling, estimating; sj@sjcivil.com, 808-271-5150. COLLISION RECONSTRUCTION EXPERT, serving all the Islands: 40 years experience, qualified as expert in state and federal courts. John H. Meserve, CRS. (808) 450-5555 jhmeserve@gmail.com

CIVIL LAW FIRM seeking associate attorney with one to two years experience. Candidate must have strong research and writing skills. Salary commensurate with experience Please send resume and recent writing sample to:jan@ortizlawhawaii.com

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DORVIN D. LEIS CO., INC. is seeking an attorney with five or more years of experience in construction contract administration. Qualified candidates will show an aptitude for structuring, drafting, reviewing and negotiating agreements. Clear communication is a must. Requirements: Licensed to practice law in Hawaii; 2-7 years’ experience in contract negotiation. Interested applicants can email resume to tamzenl@leisinc.com

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REAL ESTATE: Over 45-years as a Developer, Broker, Builder and Realty Advisor. HI Broker’s License, MBA/USC, extensive development and brokerage background. Seasoned real estate veteran with substantial “Real-World” experience and proven Trial testimony. Web: www.castlelyonshawaii.net. Watch 1-minute video. Call Michael K. Ryan, President, CastleLyons Corp. -- 808.282.4059. REAL ESTATE/PROPERTY MGMT/AOAO expert. See www.jurispro.com. Search for “Griswold”. Robert S. Griswold, CRE, CPM, CCIM, PCAM, CCAM, GRI, ARM. www.griswoldremgmt.com (858) 597-6100

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LEGAL WRITING /RESEARCH EXPERIENCED ATTORNEY will provide legal writing services. Motions, memos, complaints, appellate briefs, and other writing assignments. Reasonable rates. Writing samples, and references provided on request. Call (808) 7358701 or (808) 227-2141.

OFFICE SPACE 2 office spaces in the Historic Hawaii Times Bldg 928 Nu’uanu Ave. 1- 130 sq ft with shared reception area & kitchen. Furnished. 2-290 sq ft furnished, separate entrance. Available July 1. 808-534-1040 jslawsky@1stallied.com AVAILABLE -Immediately. Located in Waterfront Plaza, Executive Suite. Two window offices (1 or both). 2 secretary carrels, storage closet available too. Includes use of conference room, kitchen, reception area. Shared law/CPA office. Ample parking. Call Scott @ 295-9577.

RECRUITING / TEMP STAFFING HiEmployment is Hawaii's best choice for finding top legal talent. Professional recruiting and temp staffing services available. 695-3974. email: info@hi-employment.com March 2021

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A new day is dawning in Hawaii

As more of us get vaccinated... In-person depositions and arbitrations will be starting up again. Until that day comes, we are providing the smoothest oral depositions and arbitrations. On any given day, we are monitoring a number of ZOOM conferences simultaneously. Our talented court reporters conduct these video depositions seemlessly. All parties receive an invitation link to log into the conference. Exhibits are viewed on the screen, when needed. The process could not be more simple for the attorneys and participants.

Records Depositions: The Records Department continues to follow up regarding the status of subpoenaed business and medical records. Our team is out there picking up records and preparing transcripts for attorneys and their staffs. While we all face changes during this time, one thing stays the same: our commitment to our clients and their needs. Regardless of the challenges this pandemic presents, we’ll be there for you. We are your local reporting firm and have been since 1975!

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