JUDGMENT LIENS/TENANCY BY THE ENTIRETY:
1. Property held as tenants by the entirety is converted to tenancy in common upon a divorce.
2. Property held as tenants by the entirety is not subject to the claims of creditors of one spouse. Where a divorce decree awards the property to the non-debtor spouse, the non-debtor spouse takes the property free of the creditor's judgment lien.
3. A court having jurisdiction of the parties may adjudicate their rights to land located in another state regardless of whether the decree orders execution of a conveyance. Although the decree itself cannot change title and although a subsequent action for that purpose must be brought in the situs state, the decree is entitled to full faith and credit in an action brought in the situs state.

ADVERSE POSSESSION: The court granted a motion for summary judgment where declarations established that predecessors-in-interest had openly used the land for pasture, erected fences around the perimeter of the property, bred and ran cattle, installed water dispensers, and maintained and cleaned the property. These actions demonstrate actual, open, and notorious possession. Successive possessions of land may be tacked together where there is privity of estate so that subsequent possessions are related to the original possession. 

FORECLOSURE:
1. The lender had standing because even though the assignment was dated prior to the mortgage, it recorded in the Land Court after the mortgage and under HRS 501-101, the time of recordation is the effective date.
2. An assignee whose assignment of mortgage was not recorded at the time of commencing an action for foreclosure may cure the defect by recording the assignment after the action commences.
3. The mortgage was not invalid due to the lender being unlicensed mortgage broker because the lender acted only in the capacity of a lender and the company that acted in the capacity of mortgage broker was licensed. This distinguishes this case from Beneficial Hawaii, Inc. v. Kida in which the unlicensed broker acted as both lender and broker.
4. Appellant's Truth in Lending claim was resolved by a decision of the Ninth Circuit and could not be relitigated based on a subsequent decision by the Federal Reserve Board.
5. Foreclosure cases are bifurcated into two separately appealable parts: (a) the decree of foreclosure and the order of sale, if the order of sale is incorporated within the decree; and (b) all other orders. Appeals of foreclosure decrees and their accompanying orders are allowed, even though additional proceedings remain in the circuit court.
6. The material inquiry relevant to a foreclosure decree is whether a default occurred, not the amount owed. Therefore, lender's admission into evidence of a general ledger that did not accurately reflect all payments was sufficient for the foreclosure cause of action because there was no claim that it did not demonstrate that a default had occurred.

CEDED LANDS: Congress' 1993 Apology Resolution and related state legislation, give rise to the State's fiduciary duty to preserve the corpus of the public lands trust, specifically, the ceded lands, until such time as the unrelinquished claims of native Hawaiians have been resolved. Therefore, the Court directed the circuit court to issue an order granting the plaintiffs' request for an injunction against the defendants from selling or otherwise transferring to third parties (1) the subject parcel and (2) any other ceded lands from the public lands trust until the claims of the native Hawaiians to the ceded lands have been resolved. [Ed. note: Does this apply to leases?]

EMINENT DOMAIN: In 2005 the City and County of Honolulu repealed its 1991 ordinance that had created a mechanism allowing owners of leasehold interests in condominium units to convert their leasehold interests into fee interests by using the City’s power of eminent domain. Plaintiffs entered into contracts with the City that required each party to use its best efforts to effectuate the condemnation and transfer of fee interests, but the City refused to honor the contracts after passage of the new ordinance. The District Court granted a summary judgment in favor of the City, holding that the contracts were void under the "reserved powers doctrine" because they purported to limit the City's discretion over the use of its eminent domain power. The 9th Circuit reversed and remanded to allow the District Court to consider whether the City's conduct satisfied the very high level of scrutiny necessary to overcome a challenge under the Contracts Clause of the United States Constitution. 

QUIET TITLE: This is a very long, complicated case in which the court affirms the lower court's holding that grants given at the time of the Great Mahele were of two separate ahupua`as and did not create a cotenancy in a single ahupua`a.

QUIET TITLE: In order to establish title to real property by adverse possession, a claimant bears the burden of proving by clear and positive proof each element of actual, open, notorious, hostile, continuous and exclusive possession for the statutory period. (Between 1898 and 1973, the statutory period was ten years. The period was extended to twenty years in 1973, but this change did not affect rights that had already matured prior to that date.)

Where one is shown to have been for the statutory period in actual, open, notorious, continuous and exclusive possession, apparently as owner, and such possession is unexplained, either by showing that it was under a lease from, or other contract with or otherwise by permission of the true owner, the presumption is that such possession was hostile.

However, where a cotenancy exists there is a special burden in proving hostile possession that requires the cotenants making a claim of adverse possession to show that they had acted in good faith in relation to their cotenants. In most cases the tenant claiming adversely must actually notify his or her cotenants that he or she is claiming against them. However, where the tenant in possession has no reason to suspect that a cotenancy exists; or where the tenant in possession makes a good faith reasonable effort to notify the cotenants but is unable to locate them; or where the tenants out of possession already have actual knowledge that the tenant in possession is claiming adversely to their interests, the notice requirement will be satisfied by constructive notice and open and notorious possession.

The Supreme Court reversed the grant of summary judgment as to one parcel because there was a question of fact as to whether the records of the Bureau of Conveyances would have put a reasonable person on notice that a cotenant existed. Summary judgment granting adverse possession as to the second parcel was granted because the recorded documents clearly gave no indication of the possible existence of a cotenant.

HAWAIIAN HOME COMMISSIONS ACT: The court held that plaintiffs lack standing to challenge state programs that preferentially treat persons of Hawaiian ancestry. NOTE: This case is included on this site because it contains a good historical discussion of the Hawaiian Homes Commission Act and a good explanation of how land was ceded by the U.S. to Hawaii in the Hawaii Admissions Act.

LIS PENDENS: An action for trespass and perpetual support does not support a lis pendens because plaintiff does not claim title to, possession of or a right of possession to defendant's property. Instead plaintiff merely seeks to encumber defendant's property to effectuate an equitable remedy for damages.

ENCROACHMENTS:
1. Where the owners of two adjoining Land Court properties orally agree to the construction of walls partially on both properties and the agreement is not recorded on the transfer certificates of either property, a subsequent owner of one property cannot force a subsequent owner of the other property to remove the encroachment. The reason is that each owner owns his portion of the walls.
2. This is a motion for summary judgment and it is a question of fact whether each owner can remove his portion of the walls and what rights and liabilities each owner has to the other. So these questions must be presented to and answered by the Land Court.

CC&R's: Even where the Condominium Declaration of Restrictions did not refer to the power of a homeowner's association to levy assessments, there was an implied obligation to pay assessments because 1) the HOA's services benefit the development, 2) the defendant was aware at the time he  purchased his property that the HOA collected assessments, 3) a partial assignment was recorded transferring the developer's rights to the HOA and 4) the HOA's charter provided that it had the power to levy assessments.

LIS PENDENS: An appeal from an order expunging a lis pendens must be dismissed as moot where the property is sold while the appeal is pending and the plaintiff failed to obtain a stay pending appeal.

MECHANICS' LIENS: A contractor cannot obtain a mechanic's lien when he fails to comply with HRS 444-25.5, which requires notice of bond and mechanic's lien rights to be given to a homeowner both verbally and in the construction agreement. This applies to any owner of residential real property, even where the owner is sophisticated and knowledgeable. This case pertained to the construction of a luxury single family house.

ADVERSE POSSESSION: As a general rule, in order to adversely possess against a cotenant, the tenant claiming possession must actually notify the cotenants that title is being claimed against them. However, an exception to that requirement applies where the adverse possessor has no reason to suspect that a co-tenancy exists because the adverse possessor held title pursuant to a deed from a cotenant that purported to convey the entire estate. Accordingly, the Court held in favor of the adverse possessor. NOTE: This case contains a good explanation of adverse possession.

QUIET TITLE / ADVERSE POSSESSION: In an action to quiet title, the plaintiff must prove either that he has paper title to the property or that he holds title by adverse possession. The complaint alleged title by both methods, but plaintiff made a motion for summary judgment based only on the paper title claim. The Court overruled the District Court's grant of summary judgment because there were issues of material fact concerning whether the person who first deeded the property was the only son and heir of the person who received the original Land Commission award in 1857. NOTE: The case contains a good explanation of Hawaii real property law starting with the Mahele of 1848.

EMINENT DOMAIN: This case concerns Honolulu's lease-to-fee condemnation ordinance under which the fee interests of condominium owners are condemned for the purpose of transferring the fee to lessees of condominium units. 1) Condemnation proceedings must be terminated if the minimum number of 25 qualifying units is not maintained at the time an application if filed and throughout the legal proceedings to convert the leaseholds to fee simple. 2) The ordinance applies to mixed-use buildings. 3) The federal Religious Land Use and Institutionalized Persons Act does not provide a defense to a Church that owns the fee interest. 

EMINENT DOMAIN: This case contains a detailed discussion of Honolulu's lease-to-fee condemnation ordinance allowing the City to acquire the fee interest of a residential condominium in order to convey fee simple title to owners of leasehold interests. The Court makes numerous determinations. Two that I find particularly interesting are: 1) It is O.K. for an owner to quitclaim other property to relatives for no consideration in order to satisfy the requirement that an applicant not own other residential real property in Honolulu and 2) An applicant is considered to own other residential real property in Honolulu even if the property he owns is uninhabitable.

LAND COURT: A Certificate of Title issued by the Land Court is conclusive as to all matters contained therein, so a foreclosing lender's title could not be challenged after the certificate was issued.

CONDEMNATION: The Hawaii Supreme Court upheld the constitutionality of an ordinance providing for the condemnation of the underlying fee interest of a leasehold condominium, and sale of the fee interest to the leasehold condominium owners. Condemnation is only constitutional if it is for a public purpose. Here the Court held that the public purpose requirement was satisfied, which was to increase the supply of residential housing, to reduce land prices, and to benefit the state economy and general public welfare.

FORECLOSURE: Non-judicial foreclosure under HRS Section 667-5 is constitutional. The statute does not violate the due process clause of the 14th Amendment because no state action is involved.

JUDGMENT LIENS: A creditor executed on property that the debtor held in joint tenancy with Dirks. Dirks, who had paid the entire price of the property, sought a declaratory judgment reforming the deed to reflect sole ownership in Dirks. The court refused to reform the deed, holding that while Dirks may not have realized all the legal ramifications of co-ownership, there was no mistake and she intended to hold title jointly.

LIS PENDENS:
1. A Circuit Court, not just the Land Court, can expunge a lis pendens recorded in Land Court.
2. A lis pendens is properly expunged where the action does not attempt to obtain title to or possession of the real property at issue.

ENCROACHMENTS: The trial court required that an encroachment be removed, involving substantial demolition and reconstruction of a portion of the residential structure that was encroaching. The court also ordered that, due to the equities involved, both parties were to split the construction cost. This resulted in an incredibly complex series of hearings since the parties could not agree on anything. It would have been much simpler and made much more sense to relocate the boundary line to the location both parties initially thought the boundary was located. I cannot tell whether the trial court judge was lacking in legal theories (e.g. a grant or easement by prescription or implication) to accomplish this or simply lacking in intelligence. The appeal was based on procedural grounds and the appellate court affirmed. 

FORECLOSURE: The detailed notice of default required by HRS §667-22 applies only to nonjudicial foreclosures. Judicial foreclosures require only a general demand for payment. Note that with a judicial foreclosure the borrower also has the benefit of the procedures that must be followed in any civil action.

ASSIGNMENT OF RENTS: Assignment of rents clauses are not construed as absolute assignments unless there is a clear indication that the parties intended to create one. Therefore, where a lessor has an implied assignment of subtenant rents, it is construed as an assignment of a security interest. Because the lessor's right to subtenant rents is not self-executing, some action is necessary before the right is perfected. For example, the lessor may obtain either actual or constructive possession of the property or secure the appointment of a receiver. Until the lessor takes action to activate the assignment, an intervening creditor with a perfected assignment of rents will be entitled to collect the rents, even though the rents were subject to the lessor's assignment at the time the creditor obtained its assignment.

SUBDIVISIONS / IMPLIED EASEMENTS: A lease violates the Hawaii County Subdivision Code and is void where it purports to lease 16.7 acres of a 17.7 acre parcel without approval of a final plat map by the County. The court also held that an implied easement was not established. The opinion contains a good discussion of implied easements, including a listing of the following requirements regarding the pre-existing quasi-easement on which an implied easement is based: 1) apparent; 2) permanent; and 3) either a) important for the enjoyment of the dominant parcel or b) strictly necessary for the enjoyment of the dominant parcel.

NEGOTIABLE INSTRUMENTS: This is a complex case that boils down to the following: The holder of notes secured by mortgages assigned the notes, and the assignee collaterally assigned the notes and mortgages back to the holder to secure payment of the purchase price. The owner attempted to pay off the loans by making payment to the assignee. The court held that since the original holder retained possession of the notes, it was a "holder" entitled to payment, and payment to the assignee did not satisfy the loans.

ADVERSE POSSESSION: This case contains a very good discussion of adverse possession. It is particularly useful because the court held that part of the disputed property was acquired by adverse possession and part was not, and thoroughly discussed both situations. The Court held that Plaintiff acquired one parcel by adverse possession that had been cultivated and planted with coconut trees. The plaintiff failed to show sufficient open and notorious possession of the other parcel that was only used only for a crude path and to repair a fence separating the plaintiff's and defendant's properties.

FORECLOSURE: The court upheld a judgment for judicial foreclosure and a judgment for a deficiency. The case is not significant from a title insurance standpoint, but contains a useful discussion of the procedural aspects of judicial foreclosure actions and appeals. Note that foreclosure cases are bifurcated into two separately appealable parts: (a) the decree of foreclosure and the order of sale, if the order of sale is incorporated within the decree; and (b) all other orders.

FEDERAL TAX LIENS: A federal tax lien against one spouse attaches to the taxpayers interest in property held as tenants by the entirety. This is dramatically different than a state judgment lien, which in most states does not attach to tenants by the entirety property if the judgment is against only one spouse.

The case also contains a useful discussion even in states that do not recognize tenants by the entirety. The court, citing other cases, explained that the federal tax lien statute itself creates no property rights but merely attaches consequences, federally defined, to rights created under state law. Accordingly, we look initially to state law to determine what rights the taxpayer has in the property the Government seeks to reach, then to federal law to determine whether the taxpayer's state-delineated rights qualify as “property” or “rights to property” within the compass of the federal tax lien legislation.

ADVERSE POSSESSION / PRESCRIPTIVE EASEMENTS
A residential leaseholder may not assert a prescriptive easement over adjoining property which the lessee's landlord owns in fee simple. Also, in calculating whether he meets the statutory prescriptive period, a lessee who subsequently becomes the fee simple owner of the leased property may not tack on the time that he, as a tenant, claimed to have adversely used his neighbor's property.

DEEDS: This is a long case, with one particularly significant issue for our purposes. The Court discusses the effect of a seller's death upon the validity of a deed delivered to escrow prior to death.

In order to be effective, a deed must be delivered. The intention of the parties is the controlling element of delivery. Where a grantor delivers a deed without any reservation of the right to recall it, the delivery effects a complete transfer of title. Where a deed is delivered to a third person to be delivered to the grantee upon the happening of an event or performance of a condition, e.g., the payment of the purchase price, the delivery is conditional. If the grantee satisfies the conditions prior to the grantor's death, the deed is effective. If the conditions are not satisfied by the time of the grantor's death, the deed is not effective.

MORTGAGES: The Court held that a mortgage arranged by an unlicensed mortgage broker is void. The Supreme Court was unmoved by the fact that this created an incredible windfall for the property owner and an unfair loss for the assignee of the mortgage.

However, the Court indicates a solution in the future for assignees of mortgages in this unfortunate situation. The Court acknowledged that an assignee may have an equitable lien to the extent the assignee paid value for the mortgage and the owner received a benefit from the loan. In this case the plaintiff was unable to establish an equitable lien because the record, strangely, did not show that it paid value in acquiring the loan.

EASEMENTS: The most equitable location of an easement by necessity is over a recently created County Road because it is already in existence and currently serves the public. This case contains a good discussion of prescriptive easements and easements by necessity.

FORECLOSURE: A cause of action for a violation of the Truth in Lending Act is barred by res judicata if it is not raised as an affirmative defense in a foreclosure action.

FORECLOSURE: Foreclosure sale is valid where bidders were not misled by the Commissioner conducting the sale, and where the bid is not so grossly inadequate as to shock the conscience.

WATER RIGHTS: Good explanation of the Public Trust Doctrine pertaining to water rights.

FORECLOSURE: The mortgagors/owners must be named in a foreclosure action, but it is not necessary to name additional co-borrowers or guarantors.

RESTRICTIONS:
1. Follows Hiner v. Hoffman, 977 P.2d 878 (1999) holding that a “two-story in height” restriction is ambiguous and therefore unenforceable.
2. There was no common scheme or plan to support an equitable servitude in favor of the plaintiffs.
3. A vendor under a land sale contract does not retain sufficient interest in the property to create a restrictive covenant benefiting the property, even though the interest is sufficient to enforce a previously existing restriction.
4. A restriction must describe the benefited parcel.