Bank of Hawaii v. Shinn

• Decision Date: 29 February 2008
• Docket Number: No. 27832.,27832.
• Citation: 185 P.3d 880,118 Haw. 132
• Court: Hawaii Court of Appeals
• Parties: BANK OF HAWAI`I, Plaintiff-Appellee, v. Michael L. SHINN, Defendant-Appellant, and Bays, Deaver, Hiatt, Kawachika & Lezak, a Hawaii partnership, Defendant-Appellee, and Donald T. Eovino; Kahala Ventures, a Hawaii general partnership; First Hawaiian Bank; Donald H. Wilson, as Trustee of the Jerry T. Lynn Charitable Remainder Trust; B & T Enterprises, a California corporation; Richard Wallace and Patricia Davison Wallace, as Trustees of the Muldoon & Associates Money Purchase Plan and Trust; Universal Securities Co., Ltd., a Japan Corporation; Loren H. Cook; Darcy H. Cook; J. Roger Allen; Cathreine G. Allen; John Does 1-50; Jane Does 1-50; Doe Partnerships 1-50; Doe Corporations 1-50; Doe Entities 1-50; and Doe Governmental Units 1-50, Defendants.

185 P.3d 880

118 Haw. 132

BANK OF HAWAI`I, Plaintiff-Appellee, v. Michael L. SHINN, Defendant-Appellant, and Bays, Deaver, Hiatt, Kawachika & Lezak, a Hawaii partnership, Defendant-Appellee, and Donald T. Eovino; Kahala Ventures, a Hawaii general partnership; First Hawaiian Bank; Donald H. Wilson, as Trustee of the Jerry T. Lynn Charitable Remainder Trust; B & T Enterprises, a California corporation; Richard Wallace and Patricia Davison Wallace, as Trustees of the Muldoon & Associates Money Purchase Plan and Trust; Universal Securities Co., Ltd., a Japan Corporation; Loren H. Cook; Darcy H. Cook; J. Roger Allen; Cathreine G. Allen; John Does 1-50; Jane Does 1-50; Doe Partnerships 1-50; Doe Corporations 1-50; Doe Entities 1-50; and Doe Governmental Units 1-50, Defendants.

No. 27832.

Intermediate Court of Appeals of Hawai`i.

February 29, 2008.

Gary Victor Dubin, Honolulu, on the briefs, for Defendant-Appellant Michael L. Shinn.

Mark T. Shklov, Michel A. Okazaki, Peter Van Name Esser, Honolulu, on the briefs, for Plaintiff-Appellee Bank of Hawaii.

Harvey J. Lung, (Bays Deaver Lung Rose & Baba), Honolulu, on the briefs, for Defendant-Appellee Bays, Deaver, Hiatt, Kawachika & Lezak.

RECKTENWALD, C.J., FOLEY and NAKAMURA, JJ.

Opinion of the Court by FOLEY, J.

Defendant-Appellant Michael L. Shinn (Shinn) appeals from the "Order Denying Defendant Michael L. Shinn's Rule 60(b) Motion on Statutory and Due Process Grounds (1) to Set Aside this Court's December 18, 2003, `Order Granting Plaintiff's Motion to Extend Deficiency Judgment Against Defendants Michael L. Shinn and Kahala Ventures Entered on 12/21/93,' and (2) to Expunge this Court's December 21, 1993, `Plaintiff Bank of Hawaii's Joint and Several Judgment Against Defendants Michael L. Shinn, Donald T. Eovino, and Kahala Ventures,' Recorded at the State of Hawaii Bureau of Conveyances on 12/21/93, as Document No. 93-211815, Filed on January 17, 2006," filed on March 7, 2006, in the Circuit Court of the First Circuit (circuit court).¹

On January 17, 2006, Shinn filed "Defendant Michael L. Shinn's Rule 60(b) Motion on Statutory and Due Process Grounds (1) to Set Aside this Court's December 18, 2003, `Order Granting Plaintiff's Motion to Extend Deficiency Judgment Against Defendants Michael L. Shinn and Kahala Ventures Entered on 12/21/93,' and (2) to Expunge this Court's December 21, 1993, `Plaintiff Bank of Hawaii's Joint and Several Judgment Against Defendants Michael L. Shinn, Donald T. Eovino, and Kahala Ventures,' Recorded at the State of Hawaii Bureau of Conveyances on 12/21/93, as Document No. 93-211815" (Rule 60(b) Motion), in which Shinn asked the circuit court, pursuant to Hawai`i Rules of Civil Procedure (HRCP) Rule 60(b)(4), to invalidate its December 18, 2003 order extending a foreclosure deficiency judgment that had been obtained on December 21, 1993 by Plaintiff-Appellee Bank of Hawaii (BOH) against Shinn, Kahala Ventures, and Donald T. Eovino (Eovino).

On appeal, Shinn argues that he "was simultaneously deprived of (1) his State [Hawaii Revised Statutes (HRS) ] Section 657-5 statutory procedural rights, (2) his Article 1 of Section 5 State Constitutional procedural rights, and (3) his Fifth and Fourteenth Amendment Federal Constitutional procedural rights when the [circuit] court without notice to him extended [BOH's] 1993 judgment against him, rendering that extension null and void, as a result of which [Shinn's] Rule 60(b) Motion to set aside that judgment should have been granted."

I.

On March 22, 1993, BOH filed a complaint for foreclosure against Shinn, Kahala Ventures, and Eovino. Shinn was served with the complaint through a competent adult who was residing at Shinn's Honolulu residence. Shinn failed to answer the complaint or otherwise defend. On May 6, 1993, the circuit court entered default in favor of BOH and against Shinn for failure to defend against the complaint. The circuit court filed a decree of foreclosure on June 23, 1993. On August 30, 1993, BOH moved for confirmation of the sale of the property. On October 5, 1993, the circuit court filed its order approving the commissioner's report, confirming the sale, and directing the distribution of proceeds.

On December 21, 1993, the circuit court entered "Plaintiff Bank of Hawaii's Joint and Several Deficiency Judgment Against Defendants Michael L. Shinn, Donald T. Eovino, and Kahala Ventures" (Judgment), in which the court awarded BOH judgment in the amount of $467,103.17, plus interest calculated from November 24, 1993. The Judgment was recorded on that same date at the State of Hawai`i Bureau of Conveyances as Document No. 93-211815. Shinn never appealed the Judgment.

On February 9, 1994, BOH filed a partial satisfaction of the Judgment after receiving payment of $307.43 from Eovino. On March 18, 1994 and May 24, 1996, BOH received payments of $2,333.47 and $5,554.36, respectively, towards the Judgment. On August 9, 2000, BOH filed a "Release of Deficiency Judgment Entered on December 21, 1993," as to only Eovino because the Judgment had been discharged as to Eovino in a bankruptcy proceeding. The release stated that "[t]he Judgment remains in full force and effect as to Defendants Michael L. Shin [sic] and Kahala Ventures."

On December 10, 2003, eleven days before the ten-year anniversary of the entry of the Judgment, BOH, pursuant to HRS § 657-5 (Supp.2007), filed a "Motion to Extend Deficiency Judgment Against Defendants Michael L. Shinn and Kahala Ventures Entered on 12/21/93" (Motion to Extend Judgment). The circuit court scheduled the motion to be heard on January 6, 2004. The certificate of service attached to the motion did not reflect service on Shinn. On that same date, BOH also filed an ex parte motion to shorten the time to hear the Motion to Extend Judgment, asking the circuit court to hear the motion prior to December 19, 2003; the circuit court denied the ex parte motion. There was no certificate of service attached to the ex parte motion.

On the next day, December 11, 2003, BOH filed an ex parte motion to advance the hearing on its Motion to Extend Judgment and failed to serve Shinn. The circuit court denied the motion.

On that same date, BOH filed its Submission of Original Declaration of David E. Bowman (Bowman), in which Bowman stated that Shinn had left the State of Hawai`i and BOH had recently located Shinn in Colorado and intended "to domesticate and enforce its Deficiency Judgment against him there."

On December 12, 2003, BOH filed an ex parte motion for reconsideration of the circuit court's denial of its motion to advance the hearing on the Motion to Extend Judgment, again failing to serve Shinn. BOH argued that it had a right, pursuant to HRS § 657-5, to extend the Judgment and Hawai`i case law suggested that the Judgment had to be extended before the ten-year expiration date of December 21, 2003. The circuit court granted this motion and scheduled the hearing for December 18, 2003. The amended notice of hearing did not reflect service on Shinn.

On December 18, 2003, the circuit court filed its "Order Granting Plaintiff's Motion to Extend Deficiency Judgment Against Defendants Michael L. Shinn and Kahala Ventures Entered on 12/21/93, Filed 12/10/03."

On August 29, 2005, Shinn filed a petition for a writ of mandamus in the Hawai`i Supreme Court, and on September 27, 2005, the supreme court denied Shinn's petition without prejudice to Shinn seeking relief in the circuit court.

On January 17, 2006, in the circuit court, Shinn filed his Rule 60(b) Motion, in which he sought relief from the extension of the Judgment on grounds that he had no notice of the proceedings despite BOH's knowledge of his whereabouts. BOH opposed the motion, arguing that it had been trying to locate Shinn since 1993 in both Colorado and Florida and that in December 2003, the information BOH had was that Shinn was in Colorado, but BOH did not have Shinn's exact whereabouts. The circuit court heard Shinn's motion on February 7, 2006. On March 7, 2006, the circuit court entered its order denying Shinn's Rule 60(b) motion. Shinn timely filed his notice of appeal on March 22, 2006.

II.

In Beneficial Hawai`i, Inc. v. Casey, 98 Hawai`i 159, 45 P.3d 359 (2002), the Hawai`i Supreme Court stated that the "circuit court's disposition of an HRCP Rule 60(b) motion is reviewed for abuse of discretion." Id. at 164, 45 P.3d at 364. The court continued:

The trial court abuses its discretion if it bases its ruling on an erroneous view of the law or on a clearly erroneous assessment of the evidence. Stated differently, an abuse of discretion occurs where the trial court has clearly exceeded the bounds of reason or disregarded rules or principles of law or practice to the substantial detriment of a party litigant.

Molinar v. Schweizer, 95 Hawai'i 331, 335, 22 P.3d 978, 982 (2001)[.]

98 Hawai`i at 164, 45 P.3d at 364.

III.

A. Because Shinn never appeared in the original proceedings and the circuit court entered default against him, Shinn was not entitled to notice of the extension proceedings.

In this appeal, the principal question we confront is whether a judgment debtor in default is entitled to notice of extension proceedings instituted pursuant to HRS § 657-5.² Shinn argues that § 657-5 gave him an "absolute right to notice of the extension proceedings before the [circuit] court had the power and authority to extend the [J]udgment[.]"

BOH argues that a defaulted party is not entitled to notice of extension proceedings. BOH cites to HRCP Rules 5 and 55 in support of this argument. Rule 5(a) states, in relevant part:

[E]very written motion other than one which may be heard ex parte, and every written notice, appearance, demand, brief or memorandum of law ... and similar paper shall be served upon each of the parties, but no service need be made on parties in default for failure to appear, except that pleadings asserting new or additional claims for relief against them...