In Re Anderson

49 B.R. 725, 1985 Bankr. LEXIS 6299
CourtUnited States Bankruptcy Court, D. Hawaii
DecidedApril 16, 1985
Docket16-01180
StatusPublished
Cited by7 cases

This text of 49 B.R. 725 (In Re Anderson) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Hawaii primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Anderson, 49 B.R. 725, 1985 Bankr. LEXIS 6299 (Haw. 1985).

Opinion

FINDINGS OF FACT AND CONCLUSIONS OF LAW RE: BANK OF HONOLULU’S ATTORNEY’S FEES AND EXPENSES

JON J. CHINEN, Bankruptcy Judge.

On October 17, 1984, Bank of Honolulu (“Bank”) filed a motion for an award of *728 expenses, including a request for certain attorney’s fees. Hearings on Bank’s motion were held on October 25, 1984 and February 4, 1985. The Bank was represented by Gregory P. Conlan, Esq.; the trustee, Terry L. Day, Esq. appeared on behalf of herself; Lilly C. Anderson, aka L.C. Gross (“Debtor”) was represented by James Duca, Esq.; and Caroline Winchester was represented by R. Steven Geshell, Esq. Based on the application for fees and expenses, affidavit of counsel, memoranda in support of and in opposition to the application for fees and expenses, the evidence adduced at the hearings and the arguments of counsel, the Court makes the following Findings of Fact and Conclusions of Law.

FINDINGS OF FACT

1. On March 4, 1978, Bank, as vendor, and Debtor, as vendee, entered into an agreement of sale with respect to certain leasehold property situate at 565 Portlock Road, Honolulu, Hawaii (“Agreement of Sale”).

2. The purchase price of the property was $825,000.00 and the maturity date of the Agreement of Sale was March 14, 1983.

3. Paragraph 16(a)(3)(i) of the Agreement of Sale provides that Debtor is to pay all expenses, including attorney’s fees, which the Bank reasonably may incur in enforcing its rights under the Agreement of Sale.

4. Paragraph 10 of the Agreement of Sale provides that Debtor is to pay utility rates and all other charges which become legally payable with respect to the property or its use which are assessed against the Bank or Debtor.

5. Paragraph 12 of the Agreement of Sale provides that, if Debtor by any act or neglect causes the Bank’s title or interest in the property to be placed in jeopardy, the Bank may cure any such default, and debt- or is required to repay to the Bank the full cost and expense, including attorney’s fees, incurred in curing such default, together with interest at the rate of 10% per annum.

6. On December 12, 1980, the Bank filed a complaint in the Circuit Court of the First Circuit (Civil No. 63797) to cancel the Agreement of Sale and retain all payments made by Debtor or, in the alternative, to foreclose Debtor’s interest in the Agreement of Sale. Paragraph 19 of the Agreement of Sale specifically provides for these alternative remedies.

7. From the time the complaint was filed through the present, the law firm of Chun, Kerr & Dodd has represented the Bank in these various proceedings.

8. On May 11,1981, the Circuit Court of the First Circuit entered its order in Civil No. 63797 granting the Bank's motion for summary judgment. In that order, the Circuit Court did not cancel the Agreement of Sale, but treated the Bank’s action as an acceleration of all amounts due and owing under the Agreement of Sale and decreed foreclosure of the property if the Debtor failed to pay the amounts due within 45 days from May 1, 1981.

9. Debtor failed to pay the amounts due within the time specified and a decree of foreclosure was entered in Civil No. 63797 on July 10, 1981.

10. On August 4, 1981, Debtor filed a notice of appeal from the decree of foreclosure.

11. At the time that Debtor noticed her. appeal, the Debtor owed the Bank approximately $755,000.00 in principal under the Agreement of Sale and several thousand dollars in unpaid interest.

12. Because the Debtor’s appeal would result in a delay in the enforcement of the decree of foreclosure, the Bank cross-appealed the Circuit Court’s denial of its right to cancel the Agreement of Sale.

13. The issues on appeal dealt with (1) whether the decree of foreclosure was void for uncertainty because it did not specify the specific amount due and owing under the Agreement of Sale; (2) whether Debtor could cure her defaults after Bank’s decision to accelerate the Agreement of Sale; (3) whether the May 11, 1981 order granting the Bank’s motion for summary judg *729 ment was a final order for purposes of appeal; and (4) whether Bank was entitled to cancellation.

14. While Civil No. 63797 was on appeal, the Bank brought a separate action against Debtor in the Circuit Court of the First Circuit (Civil No. 69953) to collect approximately $19,000.00 in electrical charges due under the Agreement of Sale. On December 20, 1982, a judgment in the amount of $23,270.28 was entered in favor of the Bank and against the Debtor. This judgment included an award of $4,560.00 in attorney’s fees.

15. On December 3, 1982, the Intermediate Court of Appeals affirmed the decision of the Circuit Court in Civil No. 63797 in its entirety. See Bank of Honolulu v. Anderson, 3 Hawaii App. 545, 654 P.2d 1370 (1982). As a result, the Bank was permitted to go forward with the foreclosure of the property, although it was not permitted to cancel the Agreement of Sale.

16. On December 13, 1982, Debtor filed a writ of certiorari which was opposed by the Bank. On December 21, 1982, the Hawaii Supreme Court refused to grant cer-tiorari and a judgment on appeal was entered on January 5, 1983.

17. Subsequent to the entry of the judgment on appeal, commissioners were reappointed for the purpose of selling the property. However, before a foreclosure sale could be effected, the Debtor filed her voluntary petition under Chapter 11 on February 18, 1983.

18. At the time that the Debtor filed her petition, no payments had been received by Bank on the Agreement of Sale since May 1981. After the petition was filed, no payments were received by Bank on the Agreement of Sale until August 23, 1984.

19. In June of 1983, the Debtor owed the Bank approximately $940,000.00, including principal, interest, expenses and attorney’s fees incurred up to that date.

20. On December 20, 1983, Terry L. Day was appointed trustee over the objection of the Bank. The trustee was directed to sell the property by May 31, 1984 for an amount sufficient to pay the Bank all amounts owed under the Agreement of Sale.

21. On July 31, 1984, an order was entered permitting the trustee to sell the property free and clear of the Bank’s interest for $1.2 million. The order also established a procedure for the payment of the Bank’s expenses and for objections made by the Trustee.

22. Pursuant to the provisions of the July 31, 1984 order, the Bank filed, on August 9, 1984, the affidavit of Norman Y.M. Lee specifying the expenses it had incurred since the filing of the original action in the Circuit Court of the First Circuit.

23. The expenses incurred by the Bank included payments for attorney’s fees, lease rent, real property taxes, electricity, and other items connected with the property. As of the date of the affidavit, the expenses incurred by the Bank totaled $82,-764.23, plus $13,970.76 in interest on those expenses.

24. On August 24, 1984, the Bank was paid a total of $1,024,483.32 by the trustee.

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Bluebook (online)
49 B.R. 725, 1985 Bankr. LEXIS 6299, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-anderson-hib-1985.