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ARTICLES 44

Mechanic’s Liens – Highlights of the Statute and Some Practical Tips by Audrey E.J. Ng

10 19 12 24 18

Noetzel v. HMSA: Is Hawaii’s Anti-Subrogation Law Toothless? by Kenji M. Price

Fee Enhancements in Bankruptcy Court Hawaii Local Counsel Opinions by Raymond S. Iwamoto

HSBA OFFICERS President Jodi Kimura Yi

OF NOTE

President-Elect Nadine Ando Vice President Howard Luke Secretary Russ Awakuni Treasurer Mark M. Murakami YLD OFFICERS President Ryan Hew Vice President/President-Elect Trejur Bordenave Secretary Catherine Taschner Treasurer Ryan Loeffers

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Case Notes HSBA Happenings Court Briefs Off the Record Hawaii Access to Justice Conference Classifieds

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o s t h g i Highl e and some Statut tical Tips Prac

by Audrey E.J. Ng What do you mean, the window installer can get a lien on my home? I never even saw the guy, and I paid my general contractor in full! Yes, this can happen, under Hawaii’s mechanic’s and materialmen’s lien statute, §§ 507-41 through -49 of the Hawaii Revised Statutes. Because the statute prescribes procedural requirements that differ from other civil actions, and because a lien on real property is such a significant remedy, it is valuable to be familiar with the statute and how it is applied. Who can obtain a mechanic’s lien? The Hawaii mechanic’s lien statute provides the remedy to persons “furnishing labor or material in the improvement 4 November 2016

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o f real property.” Haw. Rev. Stat. § 507–42. An “improvement” means “construction, repair, alteration of or addition to any building, structure, road, utility, railroad, or other undertaking or appurtenances thereto, and includes any building, construction, erection, demolition, excavation, grading, paving, filling in, landscaping, seeding, sodding, and planting, or any part thereof existing, built, erected, placed, made, or done on real property, or removed therefrom, for its benefit.” Id. The owner must have entered into a contract for the improvements, whether express or implied. However, the potential lienor can be a subcontractor or material supplier without direct privity of contract with the owner. In addition to contractors and suppliers, architects and other design professionals can avail themselves of the mechanic’s lien remedy. Under Haw. Rev. Stat. § 507-41, “labor” includes “professional services for preparation of plans and supervision if and to the

extent used in or for the improvement of real property”. However, the amount of the lien is limited to the extent the architect’s plans result in a tangible improvement being built. Nakashima Assocs. v. Pac. Beach Corp., 3 Haw. App. 58, 641 P.2d 337 (1982). Projects developed by the federal, state, and county governments are not subject to mechanic’s liens. In general, certain subcontractors on government projects can make claims upon the performance and payment bonds provided by the general contractor under the Miller Act, 40 U.S. Code §§ 3131-3134, or the Hawaii Public Procurement Code, Haw. Rev. Stat. Chapter 103D. What real property is affected? The lien attaches to the improvement and the interest of the owner of the improvement in the real property upon which it is situated or for the benefit of which it was constructed. Haw. Rev. Stat. § 507-42. If a tenant contracts for the improvement, then the lien will only attach to the tenant’s leasehold interest, provided, however, that if the lease requires the improvement at issue, then the lien will attach to the interest of

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the lessor. Id. Hawaii’s condominium property regime law provides protection for condominium unit owners: where one unit owner contracts for improvements to his unit, the mechanic’s lien will attach to the unit and the unit owner’s interest in the common elements, but not to any other unit or the common elements as a whole. Haw. Rev. Stat. § 514B-43. Procedural requirements, or why being able to count is important. Because the mechanic’s lien statute is in derogation of the common law, the procedural requirements for obtaining a mechanic’s lien will be strictly enforced. Significant rights can be affected if the express time deadlines in the statute are missed. Time to file the Application. An application for a lien and a notice of a lien must be filed in the circuit court where the improvement is located no later than 45 days after the date of completion of the improvement at issue. Haw. Rev. Stat. § 507-43(b). The term “date of completion” is defined under Haw. Rev. Stat. § 507 43(f) and refers to the date of the filing of an Affidavit of Publication in the relevant circuit court as to the publication of a notice by the owner or the general contractor of the completion or abandonment of the improvement. If a valid notice of completion is not published and filed within one year after the actual completion or abandonment of the improvement, then the date of completion is deemed to be one year after actual completion or abandonment. Haw. Rev. Stat. § 507-43(g). Contents of the Application. The information required to be included in an application for a mechanic’s lien is primarily set forth in Haw. Rev. Stat. § 507-43. Among other things, the application should include: (1) a description of the contract; (2) a description of the labor and/or materials; (3) a description of the real property sought to be made subject to the lien; (4) the amount of the claim; and (5) the names of necessary parties. 6 November 2016

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It is a good practice to obtain a title report or obtain a copy of the most recent deed on the property to use in preparing the application for a mechanic’s lien. The title report will provide counsel with the correct legal description to use in the application and the identities of the respondents, i.e. the persons with interests in the property to name in the application. The title company will need time to perform the search, which is one of the reasons the potential lienor should call his attorney sooner than the morning of the 45th day. Time for service of the Application. The return day hearing on an application for a lien is held within 3 to 10 days after the filing of the application. Haw. Rev. Stat. § 507-43(a). A copy of the application for a lien and the notice of lien must be served on the respondents in the manner prescribed under Hawaii law for service of summons. If any person entitled to notice cannot be served as so provided, then notice may also be given by posting the application and notice on the improvement itself. Id. At the return day, if the application for mechanic’s lien is contested, the court will usually continue the hearing to a later date to determine if there is probable cause for the mechanic’s lien to attach. The length of time until the probable cause hearing largely depends on the court’s calendar and the anticipated length of the probable cause hearing. The Probable Cause Hearing. Depending on the complexity of the claim, the court might order the parties to proceed in a manner similar to pretrial procedure, including exchanging of witness lists and exhibits, participating in mediation or a settlement conference, and planning discovery, if any. The court might order that direct testimony be presented by affidavits or declarations of the witnesses and that only cross-examination will be allowed at the hearing, with redirect examination and recross-examination if necessary. Where the economics of the case allow, expert testimony might be useful. A party will

want to consider whether there are legal issues that can be resolved by motion prior to the hearing. The parties might want to offer pre-hearing briefs and/or post-hearing memoranda. At the probable cause hearing, the lien applicant has the burden of proof. The standard of proof is “the reasonable probable outcome” of the dispute, rather than the usual preponderance of the evidence standard in civil cases. Haw. Rev. Stat. § 507-43(a). The lien applicant must prove (1) the existence of a contract; (2) the labor and/or materials provided; (3) the price agreed to be paid (provided that the price does not exceed the value of the labor and materials) and/or the fair and reasonable value of the labor and materials; and (4) payment was demanded and is due and payable. The respondent then presents evidence in support of its defenses, which will usually consist of set-offs from the amount claimed by the lien applicant. Set-offs most often arise from uncompleted work, defective or deficient work, work not in compliance with the contract, and delays. The respondent might also have defenses based on the contractor licensing law, Chapter 444 of the Hawaii Revised Statutes. Where the lien is sought for services for which a contractor’s license is required, the requirements of Chapter 444 must be followed or the contractor might not be entitled to a mechanic’s lien. Haw. Rev. Stat. § 444-22. One facet of the interplay between the contractor licensing law and the mechanic’s lien law is the effect of Haw. Rev. Stat. § 444-25.5, which requires, where the construction involves a residential improvement, that the contractor explain to the homeowner all lien rights of all parties, explain the homeowner’s option to demand bonding on the project, and include in the written contract the same explanation, among other things. The contractor’s failure to comply with this section will likely be a defense to attachment of the lien. See 808 Dev., LLC v. Murakami, 111 Haw. 349, 141 P.3d 996 (2006). Another facet of the mechanic’s lien law that might surprise the parties is that

even if the respondent has already paid for the work, that fact is not a defense to the lien. Take the situation described in the beginning of this article – the general contractor bills the owner for the window installation work, and the owner pays the general contractor for the window installation work, all as provided under the contract. However, the general contractor has cash flow problems and fails to pay the window installation subcontractor. While this is likely a default by the general contractor under its contract with the owner, the window installation subcontractor is entitled to a lien on the owner’s property, and the fact that the owner is out of pocket is not a defense. The owner might be required to pay twice for the same work in order to avoid a lien on her home. After hearing the evidence, the court then decides if a lien should attach and in what amount, applying the standard of the reasonable probable outcome of the dispute. If the court determines that a lien should attach, it will enter an Order Directing Lien to Attach, including the amount of the lien. Pull out the calendar again, because the lien will expire three months after the entry of said Order unless proceedings are commenced within that time period to collect the amount due by filing a complaint for foreclosure of the mechanic’s lien. Haw. Rev. Stat. § 507-43(e). (Note that the time limit in the statute is three months, not ninety days.) In addition, if the property involved is registered in the Land Court system, then a certified copy of Order Directing Lien to Attach must also be recorded within seven (7) days after entry of the Order at the Office of the Assistant Registrar of the Bureau of Conveyances to preserve the lienor’s rights against subsequent encumbrances and purchasers. An aside about arbitration — the parties to a construction contract often agree to submit their disputes to arbitration, while also preserving the mechanic’s lien remedy for the contractor. In that Richard Alan Gordonsituation, the parties might want to proceed with arbitration on the claim, with the arbitration award serving as the basis for the amount of the lien, if the

court allows. Foreclosure of the mechanic’s lien. After the attachment of the lien, the lienor then proceeds to foreclose on the lien. The procedure to foreclose the mechanic’s lien is similar to the foreclosure of a mortgage. Haw. Rev. Stat. § 507-47. All mechanic’s liens arising out of the same improvement will be consolidated and thus foreclosed together and will have the same priority. Haw. Rev. Stat. § 507-46. The court may award attorney’s fees and costs as it deems equitable in the light of the services performed and the benefits derived therefrom. Haw. Rev. Stat. § 507-47. Foreclosure is a de novo proceeding, and the lienor must prove its claim by the preponderance of the evidence standard. The court’s determination of probable cause in the proceeding on the application for a mechanic’s lien has no effect on issues in the foreclosure action to enforce the lien. The attachment of the lien can cause serious problems for the owner, including that it can be a default under its mortgage or its lease. The respondent can have the mechanic’s lien discharged by depositing with the clerk of the circuit court cash or a bond for twice the amount of the sum for which the claim for the lien is filed. The judgment at foreclosure, if any, will be paid from the bond. Haw. Rev. Stat. § 507-45. Discharge by “bonding off ” is a valuable alternative, for example, where a tenant wants to defend against the claim, but the landlord insists on removal of the mechanic’s lien, or where the general contractor wants to defend against the claim, but the owner insists that the mechanic’s lien be removed from her property. Priority of the mechanic’s lien, and the importance of visible commencement. As mentioned above, all mechanic’s liens arising out of the same improvement will have the same priority and will share pro rata in the amount recovered from the foreclosure. The mechanic’s lien might turn out to be senior to other November 2016

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liens already recorded on the property such as mortgages, homeowner’s association liens, and judgments, because the mechanic’s lien relates back to the visible commencement of operations for the improvement. Haw. Rev. Stat. § 507-46. “Visible commencement” means “the first actual work of improvement as part of a continuous operation, or the first delivery to the site of materials to be used as part of a continuous operation in the improvement, of such manifest and substantial character as to notify interested persons that the real property is being improved or is about to be improved.” Haw. Rev. Stat. § 507-41. Thus, the mechanic’s lien will have priority over purchasers and encumbrances that are recorded after visible commencement, except government liens, construction loan mortgages recorded prior to completion, and liens for wages up to $300 per claim. Haw. Rev. Stat. § 507-46. A lender will insist that its mortgage is recorded prior to visible commencement. However, there might be circumstances where a lender will need to rely on the priority afforded by Haw. Rev. Stat. § 507-46. If the mortgage is recorded prior to the date of completion and all or a portion of the money advanced under and secured by the mortgage is thereafter used for the purpose of paying for the improvement, and the mortgage recites that the purpose of the mortgage is to secure the moneys advanced for the purpose of paying for the improvement, then that mortgage will have priority over a mechanic’s lien arising out of the improvement even if the mortgage is recorded subsequent to visible commencement. However, the

defend and indemnify the owner and the lender against mechanic’s liens. • In the case of a landlord, require an additional security deposit from the tenant who contracts for improvements to its space or a deposit i n t o escrow of all of the construction funds. priority is afforded to principal of the loan only, not interest or soft costs. Strouss v. Simmons, 66 Haw. 32, 657 P.2d 1004 (1982). W h a t can an owner or a lender do to avoid mechanic’s liens, assuming it will make all payments due? None of these methods provides a guarantee, but the owner or the lender will want to consider the following: • First, do not allow visible commencement prior to recordation of the deed and the mortgage. • Require lien releases with each payment from the general contractor and all subcontractors. • Keep a retention from payments to the general contractor so that it can be used to pay claims. • Obtain a performance and payment bond. • Require the general contractor to

• Obtain an appropriate endorsement to the party’s title insurance policy. This will be helpful especially to a mortgage lender or the purchaser of a newly constructed project, who might not be aware of the history on the project. The mechanic’s lien is a potent remedy for contractors, material suppliers, and design professionals, and it can be troublesome if not disastrous for the owners, developers, lenders, and subsequent buyers of the project. As is the case with many things in life, all parties will benefit from preparation and vigilance. _________________ Audrey E. J. Ng is a partner at Goodsill Anderson Quinn & Stifel and has been practicing in the areas of construction and real estate development law for over 30 years in Hawaii. She would like to thank law student Elizabeth Sweeney for her assistance on this article.

Noetzel v. HMSA: Is Hawaii’s Anti-Subrogation Law Toothless? Can a car-accident victim who settles a personal injury case in Hawaii use state law to keep her health insurer from reclaiming a portion of the settlement proceeds? In Noetzel v. HMSA, Civ. No. 15-310, 2016 WL 1698264 (D. Haw. Apr. 27, 2016), Judge Susan Oki Mollway dove into the murky waters of ERISA preemption in the wake of the U.S. Supreme Court’s decision in Aetna Health Inc. v. Davila, 542 U.S. 200 (2004), and decided that such a plaintiff could not, because her state-law claims were preempted by the Employee Retirement Income Security Act of 1974 (“ERISA”). On September 2, 2010, Elizabeth Noetzel suffered injuries to her head, neck, and back from a collision with a large truck. 2016 WL 1698264, at *1. Under the terms of her insurance plan (“Plan”), HMSA—Noetzel’s health insurance provider—paid for the cost of her medical treatment. Id. Noetzel sued the driver of the truck who caused her injuries in state court, and the company that employed the driver. Id. The parties settled. Id. After learning about the settlement, HMSA notified Noetzel that it intended to seek reimbursement for the cost of the medical treatment Noetzel received, under the terms of the Plan. Id. Noetzel responded by suing in state court, asking for a determination that HMSA could not recoup the settlement proceeds. Id. at *2. She claimed that under Hawaii insurance law, HMSA had no right to reimbursement from settlement funds that did not amount to “special damages” recovered during the settlement. Id. HMSA removed the case to federal court, arguing that federal jurisdiction over Noetzel’s state-law claims was appropriate because the claims were preempted by ERISA. Id. Noetzel moved to remand the case back to state court. Id. The magistrate judge made findings and recommended that the district court grant the motion. Id.

that Noetzel’s state-law claims were preempted by ERISA §502(a). Id. at *14. Applying the two-step preemption test set forth in Davila,1 the District Court said that (a) Noetzel could have brought an action to prevent HMSA from obtaining a portion of her settlement proceeds under §502(a), which allows a person in Noetzel’s position to bring a lawsuit to “enforce [her] rights under the terms of ” an ERISA plan, and (b) HMSA’s request for reimbursement did not implicate a legal duty, much less one that exists independent of ERISA. Noetzel, 2016 WL 169864, at *12, *14. Much of the District Court’s analysis focused on the first prong of the Davila test. In ruling that Noetzel’s state-law claim was preempted, the District Court sided with three federal courts of appeals that have held that ERISA preempts antisubrogation claims brought under state law by tort victims seeking to protect their settlement proceeds from the reach of medical insurers.2 One of those courts has reasoned that anti-subrogation claims like Noetzel’s, though often styled as state insurance claims, are really attempts by tort victims to free themselves from the “cloud” of an insurer’s right to reimbursement, under the terms of an ERISA plan.3 In reaching that conclusion, the District Court rejected the approach taken by the U.S. Court of Appeals for the Second Circuit. The Second Circuit has ruled that state anti-subrogation claims like Noetzel’s are not based on any specific provision of a benefits plan covered by ERISA, and thus are not claims that a tort victim can bring “under the terms of ” an ERISA plan.4 In the District Court’s view, the Second Circuit’s approach “flout[ed] the direction,” of Davila, which instructs federal courts to look beyond the claims that a tort victim like Noetzel asserts in a state court pleading (i.e., the tort victim’s state anti-subrogation claims) to determine what the tort victim is really trying to do: bring a claim under state law that the tort victim could have brought under ERISA §502(a). Noetzel, 2016 WL 169864, at *10-11.

The District Court’s Decision The District Court rejected the magistrate judge’s recommendation, and held

Implications of Noetzel Noetzel has significant implications for the insurance industry in Hawaii, and it

by Kenji M. Price

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raises difficult questions regarding the scope of §502(a). First, it is notable that the District Court did not address whether Marin General Hospital v. Modesto & Empire Traction Co., 581 F.3d 941 (9th Cir. 2009), had any bearing on the first prong of the Davila preemption test. In Marin, the Ninth Circuit held that a plaintiff ’s state-court action against an ERISA plan administrator to enforce the terms of an oral contract was not preempted by §502(a), because the action was not an attempt to enforce the terms of an ERISA plan. Instead, the Marin court ruled that it was an attempt to recover damages for breach of an oral contract where the plaintiff ’s ERISA plan did not contain a provision that would give the plaintiff a basis for bringing an action to recover for the breach. Marin, 581 F.3d at 947. That the District Court in Noetzel did not mention Marin in analyzing the first prong of the Davila test is significant. There is at least a colorable argument that the plaintiff ’s state court action in Marin is analogous to Noetzel’s anti-subrogation action. After all, like the plaintiff in Marin, whose ERISA plan did not give rise to its right to recover damages for breach of an oral contract, Noetzel does not appear to have an ERISA plan that contains an antisubrogation clause that would give rise to Noetzel’s anti-subrogation action in state court. The Second Circuit has drawn this comparison in a case similar to Noetzel’s, expressly referring to Marin as persuasive precedent.5 After the District Court’s ruling in Noetzel, however, tort victims in Hawaii will have to grapple with whether, or to what extent, they can rely on Marin in trying to keep their anti-subrogation claims in state court. Second, Noetzel highlights the uncertainty in the Ninth Circuit on what it means for a tort victim to bring an antisubrogation action “under the terms of ” an ERISA plan, within the meaning of §502(a). The Third, Fourth and Fifth Circuits are essentially of the view that, because a state anti-subrogation action is an attempt to protect (or recoup) benefits paid under the terms of an ERISA plan, it is an action that a tort victim could bring “under the terms of ” an ERISA plan, even if there is no specific provision in the ERISA plan that gives the tort vic-

tim a basis for cutting off an insurer’s right of subrogation. The Second Circuit, on the other hand, takes the position that, absent a specific provision in an ERISA plan that provides a tort victim with a right to be ‘free from subrogation,’ it cannot be said that a plaintiff can bring an anti-subrogation action under the terms of an ERISA plan.” Wurtz, 761 F.3d at 242. Determining who has the better argument is a ripe issue for the Ninth Circuit to decide. Ultimately, the Court’s decision in Noetzel reflects the majority view of a complex issue where state and federal law intersect. The Court’s conclusion appropriately discourages plaintiffs from forum-shopping to protect their settlement proceeds. However, in doing so, it arguably allows insurance providers like HMSA—who have much deeper pockets than tort victims—to earn a windfall by collecting monthly premiums to cover a tort victim’s medical costs, paying those medical costs when the tort victim is injured, and then recouping the costs through a subrogation action. __________________

1In Davila, the Supreme Court ruled that a state-law claim is preempted by ERISA if: “an individual, at some point in time, could have brought his claim under ERISA § 502(a)(1)(B),” and “there is no other independent legal duty that is implicated by a defendant’s actions.” 542 U.S. at 210.

the terms of his plan or as a claim to enforce his

2 See Levine v. United Healthcare Corp., 402 F.3d 156, 163 (3d Cir. 2005) (“Where . . . plaintiffs claim that their ERISA plan wrongfully sought reimbursement of previously paid health benefits, the claim is for ‘benefits due’ and federal jurisdiction under section 502(a) is appropriate.”); Arana v. Ochsner Health Plan, 338 F.3d 433, 438 (5th Cir. 2003) (holding that plaintiff ’s anti-subrogation claim was attempt to “enforce his rights under the terms of the [ERISA] plan, for he [sought] to determine his entitlement to retain the benefits based on the terms of the [ERISA] plan”); Singh v. Prudential Health Care Plan, 335 F.3d 278, 291 (4th Cir. 2003) (“[Plaintiff ’s] claim to recover the portion of her benefit that was diminished by her payment to Prudential under the unlawful subrogation term of the plan is no less a claim for recovery of a plan benefit under § 502 than if she were seeking recovery of a plan benefit that was denied in the first instance.”).

4 See Wurtz v. Rawlings Co., LLC, 761 F.3d 232 (2nd Cir. 2014). The Wurtz court ruled that the plaintiff ’s anti-subrogation claims were “based on a state law that regulates insurance,” which, the court explained, meant that they were not expressly preempted by ERISA, pursuant to ERISA § 514(a)-(b). See id. at 244 (“[P]laintiffs’ claims are based on a state law that regulates insurance and are not based on the terms of their plans.”).

3 See Arana, 338 F.3d at 438 (5th Cir. 2003) (plaintiff ’s claim under state anti-subrogation law could be “fairly . . . characterized as a claim to recover benefits due to him under

rights under the terms of the plan” because plaintiff ’s benefits were “under something of a cloud,” because insurer was asserting a right “to be reimbursed for the benefits it has paid for [plaintiff ’s] account” (internal quotation marks omitted)).

5 See Wurtz, 761 F.3d at 244 (citing Marin for proposition that state anti-subrogation action is not an action that plaintiff could have brought under the terms of ERISA plan).

Kenji M. Price is Of Counsel at Carlsmith Ball LLP, where his practice focuses on white collar crime and complex litigation. This article is submitted on behalf of the Federal Bar Association (“FBA”) Hawaii Chapter. For further inquiries about the FBA Hawaii Chapter, please visit http://www.fedbar.org/chapters/ hawaii-chapter.aspx or telephone Kenji Price at 808-523-2531.

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Fee Enhancements in Bankruptcy Court Earlier this year, Curtis Ching, Assistant United States Trustee for the District of Hawaii, gave a talk about fee enhancements in bankruptcy cases. One of the core duties of the United States Trustee’s office is reviewing applications filed for compensation. 28 U.S.C. § 586(a)(3)(A). The statutory authority for fees sought in bankruptcy court is 11 U.S.C. § 330. The bankruptcy court is authorized to award only “reasonable compensation.” 11 U.S.C. § 330(a). The court on its motion or on the motion filed by the U.S. Trustee may grant fees that are less than the amount requested. In determining reasonable compensation, the court shall consider the following relevant factors: the time spent on services; the rates charged for such services; whether the services were necessary or beneficial at the time; whether the services were performed within a reasonable amount of time commensurate with the complexity, importance, and nature of the problem, issue, or task addressed; whether the professional has been board certified or otherwise has demonstrated skill and experience in the bankruptcy field; whether the compensation is reasonable based on the customary compensation charged by comparable practitioners outside of bankruptcy. The Ninth Circuit uses the lodestar method (multiplying the reasonable rate times the number of hours worked) to determine “reasonable compensation” under Section 330. See In re Manoa Finance Company, Inc., 853 F.2d 687 (9th Cir. 1988). Subsumed within the lodestar are: (1) the novelty and complexity of the issues; (2) the special skill and experience of counsel; (3) the quality of representation; and (4) the results obtained. Id. at 691. “There is a ‘strong presumption’ that payment of one’s standard hourly rates constitutes ‘reasonable compensation.’” Id. at 692. To claim a fee beyond 12 November 2016

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the lodestar, the professional must overcome the presumption by two categories of specific evidence: (1) the results obtained were not reflected in either the professional’s standard hourly rate or the number of hours allowed, and (2) the bonus is necessary to make the compensation commensurate with fees for comparable nonbankruptcy services. Id. at 213; In re Meronk, 249 B.R. 208 (9th Cir. BAP 2000). In In re Kahuku Hospital, 2011 WL5884144 (Bankr. D. Haw. 2011), the Bankruptcy Court allowed “reasonable compensation” in an amount greater than the hours worked by the law firms multiplied by the attorneys’ normal hourly rates. The law firms sought a fee enhancement because there was a risk of nonpayment and a successful outcome of the Chapter 11 case. The Bankruptcy Court noted that there was a modest risk of nonpayment and temporary delays, but these factors did not independently justify a fee enhancement. In addition, the creation of a surplus estate, where all secured and unsecured creditors were paid in full with interest, leaving a surplus of about $1 million, was not an independent basis for a sizeable upward adjustment. In Kahuku Hospital, the court concluded that the debtor’s general counsel did not bill for the time preparing its final fee applications. The court further noted that the hourly rate charged by the debtor’s counsel should be at least $425 per hour from the commencement of the case. Consequently, the court allowed an increase of the lodestar and fees for preparation and presentation of the law firm’s fee application. The United States Supreme Court set standards for seeking a fee enhancement above the lodestar amount in a civil rights case, Perdue v. Kenny, 559 U.S. 542 (2010). The district court allowed a lodestar amount of $6.8 million and enhanced the award by 75% or an additional $4.5 million. The United States Supreme Court reversed and remanded the case because the lower court failed to provide a reasonably specific explana-

tion for all aspects of the fee determination, including any enhancement. Although acknowledging that the lodestar method was not perfect, there were important factors in its analysis: (1) it looks to the prevailing market rates in the relevant community; (2) it is readily administrable; and (3) it is objective. The Court stated that an enhancement may be appropriate (a) where the lodestar calculation does not adequately measure the attorney’s true market value; (b) where the attorney’s performance includes an extraordinary outlay of expenses and the litigation is exceptionally protracted; (c) where there is an exceptional delay in the payment of fees. The Fifth Circuit in CRG Partners Group v. Neary, 690 F.3d 650 (5th Cir. 2012), affirmed the bankruptcy court’s decision in allowing a $1 million fee enhancement after relying on a prior bankruptcy court decision and not on the Perdue case. The Fifth Circuit declined to apply Perdue to the bankruptcy arena, observing that Perdue was a federal fee-shifting case; there are a list of factors that bankruptcy courts consider under section 330’s plan language; there is no public purse being affected in bankruptcy cases; and there was no indication within the Perdue decision that the holding applied ouside of the civil rights context. Similarly, the Tenth Circuit in Mkt. Ctr. East Retail Prop., 730 F.3d 1239 (10th Cir. 2013) noted that the rationale of limiting enhancement of fees in only three rare and exceptional circumstances did not apply in a bankruptcy situation. Fees for defending fee applications In Baker Botts v. Asarco, LLC, 135 S.Ct. 2158 (2015), the United States Supreme Court held that section 330(a)(1) of the Bankruptcy Code (11 U.S.C.) does not permit a bankruptcy court to grant attorney’s fees for work performed in defending a fee application in court.1 The Court held that section 330(a)(1) does not allow a departure from the American Rule (each party

pays his own attorney’s fees, win or lose, unless a statute or contract provides otherwise) to permit compensation for defending fee applications in bankruptcy cases. The Court explained section 330(a)(1) provides compensation for “actual, necessary services” due for the estate administrator, and fee defense work is not done for the benefit of the administrator of the estate. The Court observed that the legislative decision to limit “compensation” to “services rendered” is “particularly telling given that other provisions of the Bankruptcy Code expressly transfer the costs of litigation from one adversarial party to the other. 135 S.Ct. at 2165. Following Asarco, some professionals have included terms in their applications for employment that the estate shall pay the professionals’ legal fees for defending fee application objections. In re Boomerang Tube, Inc., 2016 WL 385933 (Bankr. D. Del. Jan. 29, 2016). In Boomerang, a creditors’ committee counsel sought approval under 11 U.S.C. § 328(a) of their retention applications that included a provision entitling them to compensation from the debtors’ estates for any fees arising from the successful defense of their fees. The bankruptcy court agreed with the United States Trustee’s position that the decision of Asarco controlled and concluded that the fee defense provision was not a reasonable term of employment for serving as counsel for the creditors committee. Although Asarco did not prohibit fee shifting in contractual arrangements, the United State Trustee will oppose these types of requests for compensation. ________________ 1 Prior to this decision, in the 9th Circuit fees for defending fees in a bankruptcy case were generally recoverable if the fee defense was successful. Cf. In re RiversideLinden Inv. Co., 945 F.2d 320, 323 (9th Cir. 1991) (court did not abuse discretion for denying fees incurred in unsuccessful defense of fee application).

M e d i a t i o n

A r b i t r a t i o n

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The Legal Aid Society of Hawai´i extends its gratitude to the law firm of Alston Hunt Floyd & Ing for being a member of Legal Aid's Leadership Circle and for its enduring commitment to our vision of "Building a Just Society." We thank the firm for volunteering during the month of September to staff the Honolulu District Court Access to Justice Room. For pro bono opportunities or to make a donation in lieu of pro bono under HRPC Rule 6.1, please contact Sergio Alcubilla at 527-8063 or at sergio.alcubilla@legalaidhawaii.org

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CA S E N OT E S Supreme Court Contracts

Certified Constr., Inc. v. Crawford, No. SCWC-14-0001160, September 20, 2016, (Foley, J.). This case arises from the disqualification of Certified Construction, Inc.’s (Certified) bid proposal on a public works project by the County of Hawai i (County). After Certified’s bid was disqualified, Certified submitted a bid protest to the County. The Office of Administrative Hearings determined that Certified’s protest was a challenge to the contents of the bid solicitation rather than to the disqualification of its bid proposal, and thus it concluded that Certified’s protest was not timely and dismissed the case. On judicial review, the circuit court disagreed, finding that the Office of Administrative Hearings had jurisdiction to consider Certified’s challenge and the case was remanded for further proceedings. On remand, the merits of Certified’s challenge to its disqualification were reviewed by a second hearings officer who determined that Certified failed to demonstrate entitlement to relief. The decision of the second hearings officer was subsequently affirmed on review by the circuit court. Following the circuit court’s second order, Certified appealed to the ICA from the circuit court’s second order, and the County appealed to the ICA from the circuit court’s first order. The ICA determined that Certified’s protest was untimely and thus concluded that the Office of Administrative Hearings was without jurisdiction to consider Certified’s protest. The Hawaii Supreme Court concluded that the ICA erred in determining that Certified’s bid protest challenged the contents of the County’s bid solicitation; instead, Certified’s protest challenged the County’s disqualification of its bid proposal. 14 November 2016

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Appeal Pointers

Omissions from the record by error or accident may be corrected by the trial court or agency before or after the record on appeal is transmitted to the appellate court and without remand from the appellate court. HRAP 10(e)(2)(B).

Intermediate Court of Appeals Constitutional

Pogoso v. Sarae, No. CAAP-120000402, September 22, 2016, (Nakamura, C.J.). Appellant filed a lawsuit arising out of an automobile accident against Appellee, a police officer, who was on duty and pursuing another vehicle to issue a traffic citation when the accident occurred. Appellee claimed that he was entitled to immunity protection under the doctrine of conditional privilege that would shield him from liability unless his actions were motivated by malice and not by an otherwise proper purpose. The ICA concluded that the circuit court erred in applying the doctrine of conditional privilege because the Legislature’s enactment of Haw. Rev. Stat. § 291C-26 takes precedence over any common law conditional privilege that might otherwise apply. Haw. Rev. Stat. § 291C-26(d) imposes a specialized duty of care that raises a question of material fact as to whether Appellee could be found liable under that standard. Environmental

Umberger v. Department of Land and Natural Resources, No. CAAP-130002125, August 31, 2016, (Leonard, J.). This case concerned whether the Department of Land and Natural Resources (DLNR) must require each

applicant for an aquarium fish permit to comply with the environmental review procedures set forth in Haw. Rev. Stat. chapter 343 before DLNR issues a permit pursuant to Haw. Rev. Stat. § 18831(a). The ICA concluded that to interpret “program or project” so sweepingly as to require individual aquarium fish permit applicants to undertake the EA process is not a rational, sensible and practicable interpretation of the Hawaii Environmental Policy Act (HEPA) and would create an unreasonable, impractical, and absurd result. Therefore, the ICA held that aquarium collection under an aquarium fish permit issued by DLNR pursuant to Haw. Rev. Stat. § 188-31 is not an “applicant action” under HEPA. Labor

In the Matter of United Public Workers, AFSCME, Local 646, AFL-CIO v. Houghton, No. CAAp-15-0000420, September 15, 2016, (Nakamura, C.J.; Foley, J., dissenting). In this appeal, the ICA was called upon to construe Haw. Rev. Stat. § 657-5 and its use of the term “original judgment” to determine whether a request to extend a judgment was made in a timely manner. The ICA concluded that the “original judgment” as that term is used in Haw. Rev. Stat. § 657-5 was the circuit court’s judgment that created the rights and responsibilities that UPW was seeking to enforce and extend and its entry resulted in a valid and enforceable judgment. Moreover, the Hawaii Supreme Court’s stay of the circuit court’s pending appeal tolled the running of the ten-year time period for seeking an extension of the circuit court’s judgment. Foley, J. dissenting, concluded that the judgment was unenforceable until the Hawaii Supreme Court’s judgment on appeal nullified the stay pending appeal.

Quo Warranto

Ford v. Leithead-Todd, No. CAAP-150000561, September 8, 2016, (Foley, J.). Appellant contended that the circuit court erred in : (1) concluding that the 2010 Charter Commission rather than the voters of the County of Hawaii had amended the Charter of the County of Hawaii; (2) apply agency deference to the decisions of the Hawaii County Council and the Mayor and an abuse of discretion standard of review; (3) deferring to the opinion of the County’s counsel; (4) placing the burden of proof on Appellant as the Petitioner; (5) concluding that the 2010 amendment to the Charter was ambiguous; (6) concluding that the 2010 Charter Commission granted the Mayor and the County Council wide latitude to interpret the language “degree in a related field”; (7) failing to interpret the language of the 2010 amendment; and (8) denying Appellant’s motion for reconsideration. The ICA concluded that: (1) it could not conclude that the evaluation of the qualifications of the Director of Environmental Management had been textually committed to a coordinate political department; (2) a court may judge whether a specific degree is related to the duties of the Department of Environmental Management; (3) the Commission members may make the initial policy decision that “related field” meant related to the duties of the Department of Environmental Management; (4) there was no lack of respect to the Mayor or County Council in a court’s determination of whether Appellee’s law degree was a degree related to the duties of the Department of Environmental Management; (5) Appellee has the burden of proof that she is qualified for the office she holds.

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HSBA HAPPENINGS September Board Action Summary

The HSBA Board took the following actions at its meeting in September: • Voted to submit a letter to the Hawaii Supreme Court requesting consideration of further revisions to the proposed amendments to the Guidelines of Professional Courtesy and Civility for Hawaii Lawyers as recommended by James Kawachika; • Adopted the Executive and Finance Committees’ recommendation to approve the resubmitted proposed 2017 project requests of the YLD and the Civic Education Committee; • Adopted the Executive and Finance Committees’ recommendation to concur with the proposed 2017 budgets of the Attorneys and Judges Assistance Program, the Lawyers’ Fund for Client Protection, and the Disciplinary Board; • Adopted the Executive and Finance Committees’ recommendation to concur with the proposed 2017 budgets and voluntary dues of HSBA Sections; • Adopted the Executive and Finance Committees’ recommendation to approve the request of the YLD to budget up to $2500 for the ABA-YLD Delegate to the House of Delegate to attend the 2017 ABA Midyear and Annual Meetings in Miami and New York; • Adopted the Nominating Committee’s recommendation to approve the reappointments of Carol Egan, Jane Kwan, and David Proudfoot to the Hawaii State Board of CLE (aka MCLE Board) for a 3-year term beginning October 2, 2016; and

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• Voted to submit a letter of support to Chief Justice Mark Recktenwald and the Hawaii Access to Justice Commission for the RFP collaboratively prepared by HSBA members and social service representatives for the provision of civil legal services for the national Justice for All project designed to “support efforts by the states to include relevant stakeholders … in a partnership to better understand, adopt, and move toward implementation of . . . meaningful access to justice for all.” Annual License Registration Renewal

December 1 thru December 31, 2016 There are a number of ways to renew your license and update status and contact information. ONLINE: go to www.hsba.org for your electronic registration form Print and MAIL: go to www.hsba.org to print your registration form PHONE: call (808) 537-1868 IN-PERSON: visit the HSBA office weekdays 8:00 a.m. to 4:00 p.m. REMINDERS Log into the HSBA website My Account at www.hsba.org to confirm your HSBA communication e-mail address and US Postal Service mailing address for future license renewal announcements. If you need to change your communication addresses, please email Liberty Castillo at lcastillo@hsba.org. Complete your annual CLE requirement before renewing your license to avoid an automatic compliance audit. 2016 CLE requirements must be completed no later than December 31, 2016. For online CLE seminar assistance, contact cle@hsba.org. 2017 online registration forms should not be used if you are changing

your licensing status for 2016. Change of status requests for 2016 must be processed before completing the 2017 registration form. For change of status information, contact ars@hsba.org. We are here to help you. Contact us. Vacancies on Special Committee on Judicial Performance (Rule 19 Committee)

The Special Committee on Judicial Performance will have four attorney positions expiring on the committee. The duty of the committee is to implement a judicial performance program approved by the Supreme Court. Apply by November 30, 2016. For more details, please go to www.hsba.org; hover over News & Events; click on Calendar; scroll down to November 30; and click on “Deadline to Apply . . .” Member Benefits Spotlight

Hawaiian Airlines - HSBA members are eligible for a 5% discount on all transpacific web fares. For reservation instructions, sign in to your member account here: http://bit.ly/2cLgRqC. Once you are signed in to your account, click on “My Account” > “BenefitHawaiian Airlines.” Elaw Powered by ePaymentAmerica - Do not get stuck with collections, accept credit and debit card payments from your clients. Processing service is trust account compliant. Call (888) 221-2203 ext. 5904 for more information. Hawaii Symphony Orchestra - HSBA members receive a 10% discount on single tickets. For Group Sales, call (808) 380-7724. Spring Season tickets are now available! Purchase your tickets online at http://www.HawaiiSymphonyOrchestr a.org and enter promo code “HSBA.” Additional fees are applied when you order online. For tickets purchased at

Blaisdell Box Office, an additional $1 per ticket processing fee will be applied. You must show your HSBA Bar Card at the Blaisdell Box Office. Expedia - Receive a discount on hotels from Expedia. Sign up today at NPP and an additional discount over and above Expedia’s already low prices. For more information, visit: http://bit.ly/29dEhlZ. MCLE Corner

What happens if I submit my annual registration renewal form before I complete the required three CLE credit hours for the year? You will be subject to an automatic compliance audit. The HSBA highly recommends that you take your required three CLE credit hours “prior” to submitting your annual registration renewal so that you may certify on the renewal

statement that you have completed your required three CLE credit hours for the year. Please contact Debbie Blanton, Administrator, at MCLE dblanton@hsba.org for MCLE related questions and concerns. November Events

Senior Counsel Division Annual Meeting Special Guest Speaker: Dr. Maya Soetoro-Ng, Spark M. Matsunaga Institute for Peace at UH Manoa Date: Tuesday, November 15, 2016 Time: 7:15 a.m. – 9:00 a.m. Location: The Plaza Club Email SCD@hsba.org for more details. Law Day Golf Tournament Date: Friday, November 18, 2016 Time: Shotgun Start @ 12:30 p.m. Location: Mamala Bay Golf Course Email golf@hsba.org for more details.

Hawaii Supreme Court Rule 1.14 Professionalism Course Date: Saturday, November 19, 2016 Time: 8:00 a.m. – 1:00 p.m. Location: William S. Richardson School Of Law Email CLE@hsba.org for more details. Save the Date!

2017 Land Use Conference Date: Thursday, January 19, 2017 – Friday, January 20, 2017 Time: 9:00 a.m. – 4:00 p.m. Location: YWCA Registration will open December 5, 2016 Email CLE@hsba.org for more details.

November 2016

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Hawaii real estate attorneys regularly render third-party financing opin-

Counsel in connection with real estate financing transactions involving main-

Hawaii Local Counsel may or may not be familiar with the Client. Frequently,

ions on behalf of Hawaii borrowers borrowing money from Hawaii banks.

land clients borrowing money from mainland lenders. While there are vari-

the Hawaii Local Counsel has never met and will not meet (other than possi-

Some real estate financing transactions involve mainland lenders loaning

ations on the theme, usually the borrower is a mainland entity

bly over the phone or by email contact) the representatives of the

money to mainland companies doing

formed under the laws of a

business in Hawaii. The mainland lender and the mainland borrower are usually represented by mainland counsel. Sometimes, the mainland lender is also represented by Hawaii counsel, but more often than not, they are not. However, the transaction will probably require the borrower to engage Hawaii counsel (“Local Counsel”) to render a third-party opinion with respect to the aspects of the loan transaction governed by Hawaii law. The usual connection to Hawaii is that the loan is secured by Hawaii real estate. As with all real estate financing transactions, a thirdparty enforceability opinion (“Enforceability Opinion”) rendered by borrower’s counsel and addressed to the lender is required, and where Local Counsel is involved, there will be two opinions; one by the Borrower’s mainland counsel (“Lead Counsel”) and one by Local Counsel. The purpose of this article is to attempt to assist Hawaii real estate counsel in rendering third-party real estate financing Enforceability Opinions when they are engaged by mainland clients to serve as Local

mainland state but the real

borrower/client.

Hawaii Local Counsel Opinions

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by Raymond S. Iwamoto

estate that is to serve as collateral for the transaction is located in Hawaii. Sometimes the Borrower is registered to do business in Hawaii and is also the mortgagor while at other times, the mortgagor is a subsidiary of the borrower and the mortgagor could be a Hawaii entity or a mainland organized entity authorized to do business in Hawaii. The Hawaii real estate can be the primary collateral or just one among several properties in Hawaii and elsewhere. Sometimes the borrower directly contacts and hires the Hawaii Local Counsel, but frequently the borrower’s mainland counsel, who is acting as Lead Counsel, contacts the Hawaii Local Counsel and engages the Hawaii Local Counsel on behalf of the borrower/client. While the borrower/client signs the Hawaii Local Counsel’s engagement letter, the

likely, the communication will be with Lead Counsel and not the client. The Hawaii Local Counsel will usually have some familiarity with Lead Counsel, but not always. Hawaii Local Counsel will probably do some checking into the borrower/client and Lead Counsel but this will probably be an investigation of limited scope. Hawaii Local Counsel is primarily engaged to provide a third-party Enforceability Opinion to the lender and secondarily to advise the borrower/client regarding the loan documents and the transaction. The focus of this article is on the role of the Hawaii Local Counsel in rendering the Enforceability Opinion to the lender. Under the Hawaii Rules of Professional Responsibility, Hawaii Local Counsel is permitted to provide an evaluation to a non-client when requested to do so by a client. This evaluation in real estate financing transactions is in the form of a third-party Enforceability Opinion. A fundamental difference between a Local Counsel opinion and a Lead Counsel opinion is illustrated in the circumstance when the borrower is a mainland entity while the mortgagor is

either an entity organized in Hawaii or a mainland entity authorized to do business in the State of Hawaii. In a majority of cases, the borrower, and not the mortgagor, signs the note and other loan documents while the mortgagor and not the borrower signs the mortgage and other security instruments governing Hawaii collateral. This circumstance will result in a clear demarcation between what Lead Counsel opines on and what Local Counsel opines on. Lead Counsel will opine on the borrower’s and (if the mortgagor is not a Hawaii entity) the mortgagor’s legal status and the enforceability of the note and other loan documents while Local Counsel opines on the enforceability of the mortgage and other security instruments. The thirdparty Enforceability Opinion practice is a matured practice with a wealth of published articles to guide the opinion

giver. There has been a wealth of guidance on the rendering of third-party opinions.1 At the 2014 Hawaii State Bar Association convention, an opinions committee of the Real Property and Financial Services Section of the Hawaii State Bar Association presented a panel discussion highlighting a then recently published report. The “2012 Report” was a joint effort by the Committee on Legal Opinions in Real Estate Transactions of the American Bar Association Section of Real Property, Trust and Estate Law, the Opinions Committee of the American College of Mortgage Attorneys, and the Attorneys’ Opinions Committee of the American College of Real Estate Lawyers. The 2012 Report expressly did not address the different issues facing Local Counsel. In order to address Local Counsel opinions, a joint drafting committee

(the “Joint Drafting Committee”), comprised of members of the same three committees that drafted the 2012 Report, has been meeting and working on a supplement (focused on Local Counsel opinions) to the 2012 Report. This Joint Drafting Committee recently published a review draft of a Local Counsel Supplement to the 2012 Report in the ACREL PAPERS – SPRING 2016.2 This review draft is hereinafter referred to as the “Supplement”. The Supplement specifically states it is still in draft form for committee review, subject to final edit, and is intended for discussion only. Therefore, the Supplement is still a work in progress. Although not yet in final form, it is still a valuable resource for the purposes of this article. Until the Supplement, little had been written about the differences in the third-party financing opinions rendered

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by an attorney who is Lead Counsel and an attorney acting as Local Counsel. The Supplement provides a valuable service to all counsel and hopefully, for Hawaii attorneys, so will this article. The Supplement presents a careful analysis and discussion regarding the issues involved in a Local Counsel opinion, the differences and similarities between Lead Counsel’s and Local Counsel’s responsibilities and presents certain principles that may or may not be reflective of the different laws of every state and therefore the customs and practices of every State’s thirdparty Local Counsel opinion practice. This article focuses on Hawaii practice. Both the 2012 Report and the Supplement treat the topic of opinion letters in scholarly fashion and should be read by Hawaii lawyers who render such opinions. This article draws from the Supplement but is less than an abbreviated use of the Supplement and should not be relied upon without a thorough review of and understanding 20 November 2016

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of the principles stated in the 2012 Report and the final version of the Supplement. In particular, the treatment of governmental approvals, usury and choice of law and whether these are implicit in the enforceability opinion are only briefly mentioned herein, and these subjects in the Supplement need to be carefully reviewed. While this author serves as a member of the Joint Drafting Committee that developed and published the Supplement, this article reflects a personal view of what would be customary practice in Hawaii with respect to Local Counsel opinions applying the principles of the Supplement and drawing extensively on the thoughts and analysis expressed in the Supplement to the extent they are consistent with what this author perceives as customary Hawaii Local Counsel practice. Where the existing local customary practice varies from the principles of the Supplement the procedures and principles of the

Supplement are discussed with recommendations. The Supplement makes it clear that no one size fits all, that these issues and their treatment are fact and circumstances driven. This paper focuses on what this author believes is frequently requested of Hawaii Counsel and discusses approaches drawn from the Supplement, and are personal opinions as to what approaches would be appropriate, given customary Hawaii practice. Status Opinions In order to opine that a Loan Agreement, a Note and/or a Mortgage is enforceable, the opinion giver first faces questions of status; i.e., the legal nature of the borrower/mortgagor, whether it is an individual, a corporation, a partnership, a limited liability company or some other business organization. These status questions become complicated when the borrower/mortgagor is not an entity organized under the laws of the State of Hawaii. At times, the customary practice

has been for Local Counsel to state in her opinion that such matters were

gagor to execute and deliver the mortgage, are subject to laws other than the

have taken all action necessary to be authorized to execute, deliver and per-

addressed by Lead Counsel and in rendering his opinion, either Local Counsel relies on Lead Counsel’s opin-

laws of the State of Hawaii. Thus, any opinion on power and authority will not

form their obligations. Typically, Enforceability Opinions

be the responsibility of Hawaii Local Counsel and instead, appropriately will

will include an assumption that all parties, other than the Borrower, are

be the responsibility of Lead Counsel.

authorized to execute the loan docu-

Hawaii Local Counsel, as with organizational documents, will therefore not review and will delete any reference to having reviewed any borrowing resolutions, by boards, parent companies, members or partners or client or other governmental certifications. Instead, Hawaii Local Counsel will be justified in assuming the following with respect to both borrower and mortgagor: due formation, valid existence, good standing under the laws of their jurisdiction, their power under their organizational documents and applicable law to execute, deliver and perform their obligations and that they

ments and to perform their obligations therein. When the borrower/mortgagor are not Hawaii entities, Hawaii Local Counsel will assume not only that all other parties to the transaction, but also the borrower and mortgagor, have satisfied all legal requirements that are applicable to them to the extent necessary to make the transaction documents enforceable against them.

ions or has no opinion regarding Lead Counsel’s opinion. This raises questions as to Local Counsel’s duty to investigate Lead Counsel. The Supplement takes a different approach. When the borrower/mortgagor is not a Hawaii entity, status is assumed and there is no mention of Lead Counsel’s opinion. It would be preferable to provide no opinion as to status when status depends on laws other than Hawaii Law. It is not Local Counsel’s kuleana to review organizational documents nor to provide status opinions on any entity not organized under the laws of the State of Hawaii. This would be consistent with the accepted customary practice of opining only on Hawaii law. Local Counsel’s opinion need not and does not mention that Lead Counsel is providing status opinions and there is no need to state any reliance on Lead Counsel’s opinion, thus obviating any duty to investigate Lead Counsel. Lead Counsel has full responsibility for status opinions. Power and Authority For a mortgagor not organized under the laws of the State of Hawaii, Local Counsel will usually opine only that the mortgagor is qualified to do business and is in good standing in the State of Hawaii. In rendering this opinion, Local Counsel will rely on the Certificate of Good Standing issued by the State Department of Commerce and Consumer Affairs, which certifies registration to do business in Hawaii. In this circumstance, the power and authorization of the borrower to borrow the money, and for the mort-

Execution and Delivery In Hawaii, execution and delivery of real estate financing documents is customarily handled by either an escrow or a title company. In a Local

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Counsel situation, often Local Counsel has a limited role and the arrangements

Mortgage, as to the collateral, is governed by Hawaii law. Yet, the Local

with the opinions expressed and that the definitions will be construed in

with the escrow or title company are made by the borrower or by Lead Counsel and Local Counsel is not

Counsel is asked to opine on enforceability of the mortgage. An accepted premise by most (and

accordance with the applicable laws of the State of Hawaii.

involved. Sometimes, execution occurs outside of Hawaii while delivery occurs

should be by all) lenders is that Local Counsel only opines on Hawaii law and

Enforceability In these Local Counsel situations,

in Hawaii through the escrow or title company which records the mortgage in the Bureau of Conveyances or with the Assistant Registrar of the Land Court. At times, the borrower/mortgagor will provide a certification to Lead Counsel regarding due execution. It is appropriate in these circumstances, especially when Hawaii Local Counsel does not attend the closing, for Hawaii Local Counsel to assume execution and delivery and if any counsel relies on the client certification it should be Lead Counsel. Although the mortgage will be recorded in Hawaii, Local Counsel often plays a very limited role. This applies even if the mortgagor is a Hawaii entity if Local Counsel is not in control of the closing process. Local Counsel seldom witnesses the signing and even if Local Counsel is present at the signing, Local Counsel often has never previously met the people signing on behalf of the mortgagor. Genuineness of signature is also assumed and that is a factual matter and not an opinion matter anyway.

the opinion will state that “we express no opinion concerning the law of any other jurisdiction”. In rare instances, a Hawaii Local Counsel who has sufficient familiarity with the limited liability law or corporate law of say, a State such as Delaware, will include those laws. However, where there is Lead Counsel, it is appropriate for Lead Counsel to assume that responsibility. In previous practice, Local Counsel would review all the loan documents including the loan documents that are governed by non-Hawaii law and then state that Local Counsel only opines on Hawaii law. This could be misleading to lenders and the Supplement recognizes that it is preferable for Local Counsel to clearly communicate to the lender receiving the opinion that Local Counsel has only reviewed the documents governed by Hawaii law in order to provide opinions only with respect to documents governed by Hawaii law.

typically the Note and Loan Agreement are governed by non-Hawaii law and the mortgage (all or part) is governed by Hawaii law. Local Counsel will not opine on the enforceability of the Note and Loan Agreement or any other instrument not governed by Hawaii law. Local Counsel will opine on the enforceability of the mortgage and other security instruments governed by Hawaii law. However, the enforceability of the mortgage is complicated because the mortgage secures a debt governed by non-Hawaii law and at times the mortgage itself chooses another state’s law with respect to provisions other than creation, perfection and enforcement of liens and so the Enforceability Opinion has to take this into account. It is therefore recommended in the Supplement that the Enforceability Opinion be qualified as being given “to the extent the Law of the State of Hawaii applies to the mortgage, giving effect to the choice of law provisions choosing Hawaii law, but excluding choice of law rules”. No opinion on the enforceability of the choice of law provisions, other than a carefully reasoned opinion, should be rendered. This limitation is preferable to an approach sometimes requested by lenders to “assume that the law of Hawaii is the same as the law of the other jurisdiction”. If Hawaii Local Counsel were to make this assumption and take this approach, it would require Hawaii Local Counsel to undertake a review of all the transaction documents while assuming Hawaii law governs. This would not be cost effective and of

Opinion Jurisdiction The typical situation in these Local Counsel transactions is that the credit documents, such as a Note and Loan Agreement, are governed by a mainland state’s law and not Hawaii law. Sometimes, the mortgage will state that it is governed by Hawaii law. At times, the Mortgage will state that the covenants and agreements in the mortgage are governed by a foreign state’s law but that creation of the Mortgage lien and the remedial aspects of the 22 November 2016

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List of Documents Reviewed Local Counsel can exclude from the list of documents reviewed the loan documents not governed by Hawaii law. The Supplement recommends, where appropriate, a statement that these documents have not been reviewed except and to the extent they include specific definitions that are incorporated into the mortgage (being opined upon) and which definitions are essential to the opinion. In this case, the Supplement includes qualifications that nothing in these other loan documents materially changes the terms of the Mortgage, that they will be enforced consistent

little value, especially since Lead Counsel will be opining on all of the

to assume ownership, title and sufficiency of description of collateral.

addition to proper form, execution, delivery and proper recordation, there

other transaction documents applying the actual law that governs.

However, lenders and their counsel have been known to attempt to encroach upon these principles and at

must also be title in the mortgagor, sufficiency and accuracy of description of

Hawaii Local Additionally, Counsel should expressly disclaim any choice of law opinion and affirmatively state that the opinion letter does not express any opinion as to the enforceability of any choice of law provision in the Transaction Documents. Title, Lien Creation Title and real property lien creation and priority of liens have traditionally been the kuleana of the title companies in Hawaii. It is customary practice in Hawaii for counsel to exclude title and lien creation and priority from its opinion letters and

times, certain Hawaii Local Counsel have considered, and have been pressured into giving, opinions similar to the following: The Mortgage is in proper form … and, upon execution, delivery and proper recordation … creates a [valid] lien under the laws of the State of Hawai`i on the Borrower’s interest in the real property collateral described therein. The Supplement describes how, in

the collateral, existence, power and authorization, all of which are assumed and that such assumptions, together with other limitations stated in the opinion, effectively assume away any lien creation opinion so that the opinion provides little value to the recipient, even in the rare case where title insurance is not obtained. This “creation” opinion is not customary practice in Hawaii. Another illustration of how some Hawaii attorneys may have been pressured by Lender’s counsel to provide a creation opinion is the following: The Fixture Filing is in proper form … Upon proper recordation of the Fixture Filing … (Continued on page 26)

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HAWAII BAR JOURNAL

COURT BRIEFS Chief Justice Appoints Michael K. Soong as Kauai Island District Court Judge

Chief Justice Mark E. Recktenwald has appointed Michael K. Soong to the District Court of the Fifth Circuit (Island of Kauai). Soong will fill the upcoming vacancy due to the retirement of Judge Trudy K.T. Senda in December. Soong served as Prosecuting Attorney for the County of Kauai from 1996-2004 and has been in private practice since then. Previously, Soong was a Deputy Corporation Counsel for the County of Hawaii from 1986-1987; a Deputy Public Defender from 19871989; a Deputy Prosecuting Attorney for the County of Kauai from 19911996; and an associate attorney with the Law Office of Walton D.Y. Hong, emphasizing in real estate transactions and land use. He also practiced criminal law and personal injury litigation as a partner in the law firm of Soong & Feldhacker, A.A.L. since 2004 and as a solo practitioner since 2009. Soong serves as a Board member of the Friends of the Kauai Drug Court and is a member of the National Association of Criminal Defense Lawyers. Soong is a graduate of the Southwestern University School of Law and was admitted to the Hawaii State Bar in 1986. The Chief Justice appoints District Court judges from a list of not less than six nominees submitted by the Judicial Selection Commission. Soong will serve a term of six years. Chief Justice Appoints Dakota K.M. Frenz as Hawaii Island District Family Court Judge

Chief Justice Mark E. Recktenwald has appointed Dakota K.M. Frenz to the District Family Court of the Third Circuit (Island of Hawaii). Frenz will fill the vacancy created by the retirement of Judge Lloyd X. Van De Car. Frenz served as a deputy prosecuting attorney in the County of Hawaii from 2006-2012 handling cases in the 24 November 2016

HAWAII BAR JOURNAL

district, family, and circuit courts; and since 2012 has been in private practice, including criminal law, family law, and civil litigation/collections. Frenz is currently a member of the Board of Directors of the Kuikahi Mediation Center and an arbitrator with the Court Annexed Arbitration Program. She also volunteers with the Friends of Drug Court and the Self-Help Center in East Hawaii. Frenz is a graduate of Whittier Law School and was admitted to the Hawaii State Bar in 2006. The Chief Justice appoints District Court judges from a list of not less than six nominees submitted by the Judicial Selection Commission. Frenz will serve a term of six years. Hawaii Supreme Court at the 2016 IUCN World Conservation Congress

Left to right: Hawaii Supreme Court Chief Justice Mark Recktenwald; National High Court of Brazil Justice Antonio Benjamin; IUCN Director-General Inger Andersen; Hawaii Supreme Court Associate Justice Michael Wilson; and UNEP Division of Environmental Law and Conventions Director Elizabeth Mrema on the IUCN “Judges and Nature” colloquium panel. (Photo courtesy of Nick Bryner)

Hawaii Supreme Court Chief Justice Mark Recktenwald, Associate Justice Sabrina McKenna, Associate Justice Richard Pollack, and Associate Justice Michael Wilson were featured speakers at the 2016 International Union for Conservation of Nature (“ICUN”)World Conservation Congress “Judges and Nature” colloquium on September 5, 2016. The session also featured a number of Hawaii’s environmental court judges from around the state who discussed a

variety of topics, including the responsibilities of judges in environmental disputes. The day’s activities began at the Hawaii Convention Center and then moved to the Hawaii Supreme Court at Aliiolani Hale for further discussions. Hawaii Supreme Court Hosts Intergenerational Climate Justice Moot Court Workshop

Students representing countries from around the world participated in the Intergenerational Climate Justice Moot Court Workshop in the Hawaii Supreme Court Courtroom on September 1, 2016.

The Hawaii Supreme Court was honored to host the Intergenerational Climate Justice Moot Court Workshop. The workshop was held in conjunction with the 2016 International Union for the Conservation of Nature World Conservation Congress in Honolulu, Hawaii. Law students representing countries around the world gathered to share global perspectives on climate change. In addition to the William S. Richardson School of Law, event sponsors included: the Elisabeth Haub School of Law at Pace University; the World Commission on Environmental Law; the IUCN Commission on Environmental, Economic, and Social Policy; the IUCN Environmental Law Centre; the Foundation for the Philippine Environment; the Australian Network of Environmental Defenders Officers; Kinetic Productions; and the law firm of Damon Key Leong Kupchak Hastert. To view the Moot Court session, please visit http://blog.hawaii.edu/ elp/icj4icj-information/.

Hawaii Local Counsel Opinions (Continued from page 23) Lender will have a valid security interest in Borrower’s interest in any fixtures described therein, to the extent a security interest in fixtures in the State of Hawai`i can be perfected by filing of financing statements under Article 9 of the Uniform Commercial Code of the State of Hawai`i. Once again, as with the mortgage,

Local Counsel’s opinion that the lender will have a valid security interest in the

dependent on state law governing future advances. In Hawaii, there are

fixtures provides little value to the lender relative to title insurance. See discussion below with respect to Form

both statutory provisions and case law that need to be considered. The Hawaii 2000 Report includes a descrip-

of Documents. The Supplement describes how

tion of both. As far as enforceability of future advances or “dragnet” or “ana-

nothing in the opinion letter addresses lien priority, but that Lenders will sometimes request an opinion on relative priority of advances made after the initial advance. Such an opinion is highly

conda” clauses, the Hawaii 2000 Report took the position that enforcement was subject to the Generic Qualification and was not saved by the Assurance.3 As for an opinion on relative priority of lien, such an opinion is rarely given, and if given, should be a reasoned opinion based on Hawaii law.

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Prior to joining O'Connor Playdon & Guben LLP, Ms. Baker served as a judicial law clerk for the Honorable Jeannette H. Castagnetti in the First Circuit Court of the State of Hawaii. In that capacity, she provided support in all areas of civil litigation from pre-trial through post-judgment motions. She previously worked at a law firm in Washington, D.C., concentrating in federal appellate practice. She also worked at the D.C. Employment Justice Center, where she assisted low-income workers with employment-related disputes.

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Assignment of Leases and Rent A Local Counsel Opinion on the enforceability of an Assignment of Leases and Rent (“Assignment”), whether included within the mortgage or in a separate instrument is sometimes rendered in connection with a financing transaction. In these transactions, the Assignment is almost always given for collateral purposes notwithstanding that the instrument, by its terms, purports to be an absolute assignment with a license back to collect rents. Therefore, the enforceability opinion, with respect to the Assignment of Leases and Rents, is an opinion as to the enforceability for collateral purposes and as with the mortgage, no opinion is given as to a creation of a lien on the Leases and Rent. However, a form of documents opinion that the Assignment is in form sufficient to assign, as collateral, the borrower’s right, title and interest in the Leases and Rents for collateral purposes may be appropriate. Form of Documents On the other hand, it is customary practice and appropriate for Local Counsel to provide an opinion that the mortgage is in form sufficient to create a lien on real property collateral,

including fixtures and leases and rent. Note that even a form of documents

Supplement address opinions as to personal property security interests.

required for the transaction.

opinion rests on several assumptions which should be included in the opin-

However, as part of the Form of Documents opinion,4 it may be appropriate to include an opinion that a sep-

Usury

arate security agreement is in form sufficient to create a security interest in

opinion, then a disclaimer would be

ion; for example, an assumption that mortgage and Uniform the Commercial

Code

Financing

Statement sufficiently provide the name of the debtor. Recordation As for the effect of recordation, where title insurance is provided, no opinion on the effect of recording is appropriate. Where title insurance is not provided, then what may be appropriate is an opinion that recordation is the only action necessary to publish record notice and to establish of record the rights of the parties in the collateral. Sometimes the Lender requests an opinion that the mortgage is in form sufficient to permit recordation. Such an opinion may unwittingly include an opinion on the form of acknowledgment under the law of the state in which execution and acknowledgment takes place. Accordingly, the Supplement recommends adding an assumption that the form of acknowledgment and action taken with respect to acknowledgment comply with the requirements of the applicable jurisdiction. Note that an opinion that the mortgage is in form suitable for recording, or sufficient to permit recordation, can be problematic and may have to be qualified by an exception for local law. This requested opinion is a misuse of the opinion process to shift the burden of document preparation and compliance onto borrower’s counsel. When recordation is a closing requirement, it is often managed by a title insurer. Personal Property Security Interests Neither the 2012 Report nor the

those items in which a security interest can be created under Article 9 of the Hawaii Uniform Commercial Code. In addition, the Supplement recognizes that it may be appropriate to provide an opinion that the mortgage is in form sufficient, upon recordation, to serve as a UCC fixture financing statement with respect to fixtures under the laws of Hawaii. No Breach or Violation This should be the responsibility of Lead Counsel and it is not appropriate for Local Counsel to opine on breach of Organizational Documents or third-party agreements or contracts or violation of Law. A no violation of law opinion adds little to the Enforceability Opinion. At times, Lead Counsel will provide an opinion that execution and delivery of the transaction documents and performance of payment obligations do not violate law. As is the situation with the assurance of creation of liens, the assurance as to whether execution and delivery of the Mortgage violates law is appropriately a matter for title insurance protection rather than an opinion by Local Counsel. As stated in the Supplement, the Enforceability Opinion should not be read as providing assurance that the mortgagor or the collateral is in compliance with law. Local Counsel is frequently unfamiliar with the Borrower’s or Mortgagor’s business and since it would not be cost effective for Local Counsel to research this, Local Counsel should expressly state that she expresses no opinion as to any governmental consents that may be

If Hawaii Local Counsel does not intend to provide an implied usury appropriate. Confirmation of No Litigation Lenders will sometime request that Local Counsel provide a negative assurance regarding litigation involving the subject of the opinion. This is not an opinion but a statement of fact and normally should be asked of and the assurance given by Lead Counsel. Federal Law This is also appropriately a matter for Lead Counsel. The following chart summarizes the suggested division of Labor between Lead Counsel and Local Counsel: When borrower and mortgagor are non-Hawaii entities: Lead

Local

Counsel

Formation

Valid Existence

Power

Authorization

Authorization to do

Business in Hawaii Good standing in Hawaii Enforceability of Note

Enforceability of Mortgage

Form of Mortgage

Execution

Delivery

No Breach or Violation of

Organizational Documents Third-Party Agreements No Litigation Assurance

Federal law

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HAWAII BAR JOURNAL

Conclusion Hawaii Counsel should note that the Supplement includes a discussion of certain topics that are not restricted to Local Counsel Opinions, but are applicable to all Enforceability Opinions in real estate transactions. For example, the discussion on the use and reliance on the Opinion Letter is noteworthy, especially the description of how, since the 2012 Report, rating agencies have confirmed that while they should be included as entities to whom the opin-

OBJECTIVE OBJE CTIVE SETTLEMENT ADVISORS

ion letter may be furnished, they should not be included as addressees or reliance

Dona L. Hanaike, J. D. 1188 Bishop Str Street eet Suite 2106 Honolulu, HI 96813 DLHanaike@ringlerassociates.com (808) 521-7666

parties.

Finally,

the

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sent borrowers and mortgagors in these

long process that involved seasoned real

transactions, but also Lenders. These lawyers who represent lenders and borrowers are members of the ABA Real Property, Trust and Estate Law Section, the American College of Real Estate Lawyers and the American College of Mortgage Attorneys.

Hopefully the

Supplement, and in Hawaii, this article will assist in the negotiation process between lenderâ&#x20AC;&#x2122;s and borrowerâ&#x20AC;&#x2122;s counsel in closing these real estate financing transactions in Hawaii. __________________ 1 Opinion Committee of the Real Property and Financial Services Section of the Hawaii State Bar Association, Hawaii 2000 Report Regarding Lawyersâ&#x20AC;&#x2122; Opinion Letters in Mortgage Loan Transactions, 22 U. HAW. L. REV. 347 (2000) (the â&#x20AC;&#x153;Hawaii 2000 Reportâ&#x20AC;?); â&#x20AC;&#x153;Guidelines for the Preparation of Closing Opinions,â&#x20AC;? 57 Bus. Law. 345 (2001); Statement on the Role of Customary Practice in the Preparation and Understanding of Third-Party Legal Opinions 63 BUS. Law 1277; ABA Statement on the Role of Customary Practice in the Preparation and Understanding of Third-Party Legal 28 November 2016

HAWAII BAR JOURNAL

Opinions, September 2007 Hawaii Bar Journal; Real Estate Finance Opinion Report of 2012 47 Real Prop. Tr. & Est. J. 213 (2012); Real Estate Finance Opinion Report of 2012, Real Prop. Tr. & Est. J.213 (2012) (the “2012 Report”). 2 Available from the American College of Real Estate Lawyers, 11300 Rockville Pike Suite 903, Rockville, Maryland 20852, Telephone (301) 816-9811 or through the American Law Institute of Continuing Legal Education website (www.ali-cle.org). 3 The generic qualification is a general statement that certain provisions in the loan documents may not be enforceable. This generic qualification is accompanied by an assurance regarding the enforceability of key provisions of the loan documents. 4 A “Form of Documents” opinion with respect to mortgages or security agreements addresses only the sufficiency of the form of the mortgage or the form of the security agreement to grant a mortgage lien or a security interest. It is not customary practice to provide an opinion that the mortgage actually creates a lien or that the security agreement actually creates a security interest.

Raymond S. Iwamoto, Partner, Schlack Ito, LLLC. Fellow and former member of Board of Governors American College of Real Estate Lawyers, former Vice Chair ACREL Opinions Committee, Editorial Board American Law Institute, former U.S. Army Captain, Vietnam War Veteran, former State Judge Advocate Hawaii Army National Guard, listed in International Who’s Who of Real Estate Lawyers, The Best Lawyers in America, Chambers USA. Graduate McKinley High School

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November 2016

HAWAII BAR JOURNAL

OFF THE RECORD Dan Colon was named president of the Hawaii Association of Justice (“HAJ”), the Hawaii affiliate of the American Association of Justice (“AAJ”). He wrote: “The mission of both AAJ and HAJ is to protect the rights of individuals, maintain judicial integrity and independence, preserve the jury system, and enhance trial practice efforts to ensure that any individual harmed by misconduct or neglect can obtain justice in our courtrooms. HAJ’s active members represent victims of negligence throughout the state with a focus on protecting all citizens of Hawaii and visitors to our state in serious injury, employment, and consumer protection matters.” Joyce Tam-Sugiyama has been named a partner at Carlsmith Ball. She first joined the law firm in 2015 as an associate in the firm’s Entertainment and Intellectual Property and Litigation and Alternative Dispute Resolution practice groups. Prior to joining the firm, she was an associate at Kirkland & Ellis in New York. William Tanaka has joined First Hawaii Title Corporation as president. He was formerly the general counsel of Fidelity National Title and previously an associate attorney with Goodsill Anderson Quinn & Stifel. Jerry Chang, Jasmine Fisher, and J. Chad Griffith have joined Alston Hunt Floyd & Ing. Chang joined the firm as Of Counsel. His practice focuses on all aspects of employment law litigation, from the initial administrative complaint through trial and appellate court process, as well as general litigation matters. Prior to joining AHFI, Chang was an associate in the Law Office of Clayton C. Ikei from

30 November 2016

HAWAII BAR JOURNAL

1996 to 2016 handling employment discrimination and merit system claims. He earned his J.D. degree from the University of Hawaii, William S. Richardson School of Law. Fisher has experience in the areas of civil and commercial litigation, government contracts, and corporate governance. As an attorney in Maryland and the District of Columbia, she served as a judicial law clerk in the District Court of Maryland and provided volunteer civil legal assistance at the Office of the Staff Judge Advocate for the U.S. Air Force. She graduated from Boston University School of Law, where she served on the editorial board of the Boston University Law Review, and completed legal externships at the Financial Industry Regulatory Authority (FINRA) and the WilmerHale Legal Services Center. Prior to joining AHFI, Griffith practiced in Japan for over 20 years where he served as in-house counsel at one of Japan’s biggest trading companies. He also served as General Counsel for one of Japan’s larger banks. He earned his J.D. degree from The University of Virginia School of Law, a Masters of Law degree in Transnational Law from Temple University Japan, and a Masters of Applied Finance from Macquarie University of Australia. He studied Chinese law at the People’s University in Beijing and is also admitted to practice law as a solicitor in England and Wales. He is fluent in Japanese and Norwegian. Calvin E. Young has joined Goodsill Anderson Quinn & Stifel as a partner. He has been practicing law for over 30 years in Hawaii and concentrates his practice in the areas of professional malpractice, aviation, insurance

bad faith and products liability. He was formerly with Chong, Nishimoto, Sia, Nakamura & Goya. News for “Off the Record”

Please send in information about movement within the bar, about elections to various boards, awards, and other news to any one of the editors on the editorial board, Carol K. Muranaka at <carol.k.muranaka@gmail.com> or Cynthia M. Johiro at <Cynthia.M.Johiro@hawaii.gov>. Articles Wanted

If you are interested in writing either a short or long article of general interest to members of the bar, please send your submissions to Ed Kemper at edracers@aol.com; Cynthia M. Johiro at cynthia.m.johiro@hawaii.gov; or Carol K. Muranaka at carol.k.muranaka@gmail.com; or to any of the volunteer editors on the editorial board. All submitted articles should be of significance to and of interest or concern to members of the Hawaii legal community. A short article is between four and eight pages, double-spaced, approximately 500 to 1,500 words. The longer law-review type articles are published in a special issue. The Cades Foundation has been gracious and generous in funding this special issue. These articles exceed 6,000 words. The Hawaii Bar Journal reserves the right to edit or not publish submitted material.

ATTORNEY REFERRALS Matthew N. Menzer, a graduate of the Boalt Hall School of Law and former Law Clerk to the Honorable Alan C. Kay of the US District Court for Hawaii, is welcoming attorney referrals, consultations, associations and co-counsel arrangements on personal injury, medical malpractice and guardianship and trust litigation matters in Hawaii and Washington. Matt has been a member of the Hawaii and Washington State Bar Associations for over 25 years. 206-903-1818 mnm@menzerlawfirm.com

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REBECCA S. LESTER, is accepting referrals in the areas of criminal defense, workers' compensation, estate planning and trust litigation. Rebecca has practiced law for over 17 years.523-9900 rlesteratty@gmail.com AUTO DETAILING IS BILLABLE HOURS coming between you and keeping your car looking nice? Drive into work and park, and by the time you go to lunch your car will be in it’s parking space looking showroom spotless. Bo’s Auto Detailing, 1142 Bethel St. 782.1526

EXPERT WITNESS AQUATIC SAFETY EXPERT 28 years aquatic Experience. Qualified as an expert in state and federal courts. See our ad on page 56 of the HSBA Directory. Aquatics consulting Service 808-960-9348 www.aquaticsconsulting.com BIG ISLAND Chiropractor / Massage Therapist Specializing in vehicle injuries. SRISD whiplash certification. Available for house calls. Rober R Holland DC, LMT 808-223-8243 FORENSIC DOCUMENTS EXAMINATIONS Detection of Forged & Fraudulent Documents. Identification of Hand-writing. Expert Witness Testimony. JOSEY & ASSOCIATES, P.O. Box 22-563, Honolulu, HI. Ph. 808-593-1667.

LEGAL CONSULTING ENVIRONMENTAL DUE DILIGENCE for property transactions. Investigation & hazard evaluation. Permitting & Compliance. Inclusion Consulting (808)261-4444 www.inclusionhawaii.com

The Hawaii Bone Marrow Donor Registry partners with the National Marrow Donor Program® to help patients in Hawaii and all over the world find healthy and willing bone marrow or blood stem cell donors. Only 30 percent of patients will find a familial donor match; therefore, others need to find unrelated matches. Bone marrow matches are more easily found between people of the same ethnic background. You can help save a life! Hawaii Bone Marrow Donor Registry is seeking potential donors between the ages of 18-44 and in good general health. It only takes 5-10 minutes to fill out a form and do a couple cheek swabs. You can register online for free and have a swab kit delivered to you: https://join.bethematch.org/ALOHA Follow the Hawaii Bone Marrow Donor Registry on Social Media! Facebook: https://www.facebook.com/hawaiibonemarrowdonorregistry Instagram: @hbmdr808

To learn more about the Hawaii Bone Marrow Donor Registry, visit:

www.bonemarrowhawaii.com November 2016

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