Olson v. Lui et al

Filing 81

ORDER DIRECTING THE REGISTRAR OF THE BUREAU OF CONVEYANCES OF THE STATE OF HAWAI'I TO EXPUNGE CERTAIN INVALID NONCONSENSUAL COMMON LAW LIENS re 1 . Signed by JUDGE ALAN C KAY on 1/6/12. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 E xhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8)(eps)CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronical ly at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications will be served by first class mail on 01/09/2012. Registrar of the Bureau of Conveyances will be served by first class mail on 01/09/2012.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
)
Edmund C. OLSON, as Trustee of )
the Edmund C. Olson Trust No. 2,)
)
U/A Dated August 21, 1985,
)
Plaintiff, )
)
)
vs.
)
)
Abel Simeona LUI, et al.,
)
Defendants. )
)

Civ. No. 10-00691 ACK-RLP

ORDER DIRECTING THE REGISTRAR OF THE BUREAU OF CONVEYANCES OF THE
STATE OF HAWAI#I TO EXPUNGE CERTAIN INVALID NONCONSENSUAL COMMON
LAW LIENS
This action is a petition to expunge certain
nonconsensual common law liens from the Bureau of Conveyances of
the State of Hawai#i under Title 28, Chapter 507D of the Hawai#i
Revised Statutes.
The real property that is the subject of this action is
all of that certain parcel of land bearing Tax Map Key Number (3)
9-5-016-006, and containing an area of 81.303 acres, more or less
(“the land”).

(2d Am. Pet. ¶ 10.)

The Olson Trust acquired

title to the land by deed from Thomas M. Okuna recorded October
25, 2005, as Document No. 2005-216739.

(2d Am Pet. Ex. A.)

copy of that deed is attached to this order as Exhibit 1.

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A

In 1988, Thomas M. Okuna, the predecessor in interest
to the Olson Trust, obtained a decree quieting title in his
favor.

(2d Mot. Mem. Pet. Ex. 8.)

The decision in that case

“Ordered, Adjudged and Decreed” that Okuna was “the owner in fee
simple absolute” of several parcels of land, including those
involved with this action as well as Tax Map Key Parcels (3) 9-5016-5, 22, 23, and 25.

(Id.)

A copy of that judgment, together

with the first page of that judgment’s Exhibit A, describing the
land to which title was quieted, is attached to this order as
Exhibit 2.
The liens at issue are as follows:
(1) The document entitled “Subpoena, Restraining Order,
Notice, Order and Judgment in a Civil Case,” recorded July 30,
2008, as Document No. 2008-121458, the first page of which is
attached to this order as Exhibit 3;
(2) The deed from Abel Simeona Lui, as grantor, to
Beverly Yolanda Feleti, as grantee (the “Lui/Feleti Deed”),
recorded January 14, 2002, as Document No. 2002-006264, the first
page of which is attached to this order as Exhibit 4;
(3) The deed from Beverly Yolanda Feleti, as grantor,
to Abel Simeona Lui, as grantee (the “Feleti/Lui Deed”), recorded
January 14, 2002, as Document No. 2002-006265, the first page of
which is attached to this order as Exhibit 5;

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(4) The deed from Abel Simeona Lui, as grantor, to Han
Kamakani Phua, as grantee (the “Lui/Phua Deed”), recorded March
12, 2004, as Document No. 2004-051779, the first page of which is
attached to this order as Exhibit 6;
(5) the deed from Han Kamakani Phua, as grantor, to
Abel Simeona Lui, as grantee (the “Phua/Lui Deed”), recorded
March 12, 2004, as Document No. 2004-051780, the first page of
which is attached to this order as Exhibit 7; and
(6) The document entitled “Affidavit of Genealogy,”
recorded June 10, 2004, as Document No. 2004-117405, the entirety
of which is attached to this order as Exhibit 8.
The Hawai#i State Legislature has found:
that there is a problem with the recording at
the land court or the bureau of conveyances
of invalid instruments which purport to
affect the property interests of various
persons, including but not limited to
government officers and employees. These
instruments, which have no basis in fact or
law, have a seriously disruptive effect on
property interests and title. They appear on
title searches and other disclosures based on
public records, and are costly and
time-consuming to expunge. When they so
appear, they may obstruct a property owner’s
ability to transfer title or obtain title
insurance and financing.
Haw. Rev. Stat. § 507D-1.

Because the “bureau of conveyances

does not have the discretionary authority to refuse to record
instruments so long as those instruments comply with certain
minimal format requirements,” the legislature found “that it is

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necessary and in the best interests of the State and private
parties to legislatively provide a means to relieve this problem,
and to limit the circumstances in which nonconsensual common law
liens shall be recognized in this State and to remedy the filing
of frivolous financing statements.”

Id.

Among the remedies provided is a legal action to have
invalid nonconsensual liens expunged.

See Haw. Rev. Stat.

§ 507D-4 (“Any party in interest in real or personal property
which is subject to a claim of nonconsensual common law lien, who
believes the claim of lien is invalid, may file a petition in the
appropriate circuit court to contest the validity of that
purported lien”); id. § 507D-7 (“If the circuit court finds the
purported lien invalid, it shall order the registrar to expunge
the instrument purporting to create it, and order the lien
claimant to pay actual damages, costs of suit, and reasonable
attorneys’ fees.”).1/

This action was filed pursuant to those

statutes.

1/

At the hearing, Defendants questioned whether this Court,
sitting in diversity, may assume the role of a Hawai#i state
circuit court, that is, whether the circuit court has exclusive
jurisdiction over petitions to expunge nonconsensual common law
liens. Nothing in Chapter 507D confers exclusive jurisdiction on
the state circuit court and precludes a federal court sitting in
diversity from hearing this case, and in any event, “state law
may not control or limit the diversity jurisdiction of the
federal courts.” Begay v. Kerr-McGee Corp., 682 F.2d 1311, 1315
(9th Cir. 1982).
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The Court entered an order granting Plaintiff’s motion
for summary judgment on January 6, 2012.

(ECF No. 80.)

Having

found that the purported liens are nonconsensual common law liens
under Chapter 507D, and that they are invalid, the Court hereby
ORDERS the Registrar of the Bureau of Conveyances to expunge the
liens described above.

See Haw. Rev. Stat. § 507D-7(a).

IT IS SO ORDERED.
DATED:

Honolulu, Hawai#i, January 6, 2012.

________________________________
Alan C. Kay
Sr. United States District Judge

Olson v. Lui, Civ. No. 10-00691 ACK-RLP: Order Directing the Registrar of the
Bureau of Conveyances of the State of Hawai#i to Expunge Certain Invalid
Nonconsensual Common Law Liens

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