Schenk v. Schenk

81 P.3d 1218, 103 Haw. 303, 2003 Haw. App. LEXIS 379
CourtHawaii Intermediate Court of Appeals
DecidedDecember 22, 2003
DocketNos. 24713, 24730
StatusPublished
Cited by2 cases

This text of 81 P.3d 1218 (Schenk v. Schenk) is published on Counsel Stack Legal Research, covering Hawaii Intermediate Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schenk v. Schenk, 81 P.3d 1218, 103 Haw. 303, 2003 Haw. App. LEXIS 379 (hawapp 2003).

Opinion

Opinion of the Court by

BURNS, C.J.

In this divorce case between Plaintiff/Third-Party Plaintiff-Appellee Frank H.N. Schenk (Frank or Plaintiff/Third-Party Plaintiff) and Defendant-Appellee Bonnie Lynn Schenk (Bonnie), Third-Party Defe.n-dant-Appellant Richard Lee (Lee or Third-Party Defendant), an attorney-at-law who represented Bonnie during most of the proceedings before and after the April 16, 1999 Divorce Decree, appeals from (1) the October 18, 2001 Decision and Order on Attorney Fees/Costs; and (2) the November 15, 2001 Judgment of the Family Court of the Third Circuit1 in favor of Frank and against Lee in the amount of $266,519.42 ($205,143.70 “plus, pursuant to [Hawaii Revised Statutes sections] 478-3 and 636-16, prejudgment interest at the rate of ten (10) per cent a year, commencing January 28, 2000, together with an award of attorney fees and costs in the total amount of’ $23,937). We reverse.

BACKGROUND

On December 6, 1996, Frank filed a complaint for divorce against Bonnie. Initially, Bonnie was represented by attorney Charles Kleintop. On May 5,1998, attorney Kleintop withdrew as counsel and was substituted by attorney Lee.

In a November 13, 1997 Order Following-Hearing on Plaintiffs August 19, 1997 Motion for Temporary Relief, the court (a) ordered Bonnie to allow Frank to inspect artifacts he had inherited that were located within the marital residence (Puakea Bay Residence) and (b) ordered that the Puakea Bay Residence “shall be listed for sale with Dodi MaeArthur[.]”

By a Stipulation Regarding Marital Assets, signed by both [Frank] and [Bonnie] on July 28 and August 4, 1998, respectively, and approved as to form by their respective counsels, [Frank] and [Bonnie] agreed to refinance the marital property in order to finance certain repairs to the marital property, to provide $150,000 to [Frank] and to [Bonnie], and to pay $100,000 to each of their respective counsels.

On September 18, 1998, Bonnie, as “Borrower,” executed a “Mortgage, Security Agreement, and Financing Statement” (the Mortgage) in favor of Lee, as “Lender.” The Mortgage secured payment of all amounts Bonnie owed Lee pursuant to their “Attorney-Client Fee Agreement dated April 15, 1998[.]” The security was the Puakea Bay Residence. This Mortgage was not recorded until Mai-eh 23,1999.

On October 22,1998, Lee filed (a) a Motion to Withdraw as Counsel for Defendant or in the Alternative Motion to Enforce Stipulation Regarding Marital Assets and (b) a Notice of Lien for Attorneys Fees in the amount of $173,474.63 against all proceeds from the July 28, 1998 Puakea Bay Residence refinance loan obtained by Frank and Bonnie and secured by the Puakea Bay Residence. This Notice of Lien for Attorneys Fees was recorded on October 23,1998.

On October 28, 1998, Lee recorded a Notice of Withdrawal of Lien for Attox-neys Fees. On October 30, 1998, Lee filed a notice of withdi-awal of his October 22, 1998 motion. On or about November 19, 1998, Lee was paid $130,000 “from the proceeds due [Bonnie] from the refinance of [Frank’s] and [Bonnie’s] fix-st mortgage on the Puakea Bay Ranch marital residence.”

The divorce tidal occurred on November 19, 1998, November 30, 1998, and December 3, 1998. On February 23, 1999, the court orally stated its decision.

The April 16, 1999 Divorce Decree awarded to Fx-ank the sole legal and physical custody of the three minor childi-en (the Schenk Children), ordered Bonnie to pay monthly child suppoi’t to Frank, established health care and educational plans for the Schenk Children, and set out a schedule for Bonnie’s visitation with the Schenk Children. The [305]*305Divorce Decree also divided the personal property of the parties, awarded to Frank numerous specified items of valuable personal property, and ordered that “[Frank] and his agents shall be permitted to enter the storage area on Oahu and the Puakea Bay Ranch residence in order to properly pack and take possession of the items described above.” It ordered the sale of the Puakea Bay Residence and that the “net proceeds from the sale of the property after payment of all commissions, liens and encumbrances shall be equally shared between [Frank] and [Bonnie].”

On May 18, 1999, Frank filed a motion for an order holding Bonnie in civil contempt for failing to comply with the court’s November 24, 1998 order requiring Bonnie to “pay back to the children’s accounts the $20,000.00 she withdrew therefrom, together with the interest that would have been earned thereon from the bank.” Frank also alleged that Bonnie failed to return a significant amount of his inherited personal property. On August 19, 1999, the court ordered Bonnie to comply with the November 24, 1998 order “from her share of the net proceeds from the sale of the Puakea Bay Ranch marital residence” and to allow Frank “to properly document, photograph, pack, and take possession of the items awarded to [Frank] and described in the Divorce Decree, in paragraph 10A and 10D.”

On October 11, 1999, Lee again moved to withdraw as Bonnie’s counsel, citing Bonnie’s failure and refusal to comply with the court’s orders. In a supporting affidavit, Lee wrote, in relevant part, as follows:

There has been extensive work done on this case, and [Bonnie’s] uncooperative behavior and actions may result in an unfavorable ruling, which would directly affect her ability to pay the full amount due and owning for legal services rendered. My law firm is small, and it would be a great financial burden to continue to represent [Bonnie] under the circumstances.

On October 26, 1999, while awaiting the family court’s ruling on his motion to withdraw, Lee filed a “Notice of Secured Mortgage, Secui’ity Agreement, and Financing Statement,” in which he stated that he had a “secured mortgage note and lien, as and for attorneys fees and costs, in the minimum amount of’ $165,330.89 secured by the Puak-ea Bay Residence, and “requested that before any economic benefits are transferred to [Bonnie] and/or before any offsets are ordered, that this lien be discharged.” On November 5, 1999, Judge Colin L. Love entered an order granting Lee’s motion to withdraw as counsel for Bonnie.

On January 28, 2000, the court filed its “Decision/Order on Plaintiffs Motion to Hold Defendant in Civil Contempt of Court and to Impose Sanctions Including an Award of Attorney’s Fees Filed May 18, 1999” stating that “there is no plausible conclusion other than [that Bonnie] must bear the responsibility of the missing items”, awarding Frank a judgment in the amount of $548,068 to be paid from Bonnie’s share of the proceeds from the sale of the Puakea Bay Residence and stating that counsel for Frank “shall prepare the order/judgment.”

On January 31, 2000, Frank filed a motion to establish priorities to the proceeds from the sale of Puakea Bay Residence and to require Lee to release his lien on those proceeds. According to counsel for Frank,

Lee steadfastly refuses all suggestions, by the parties and the court, to allow the property to close while preserving his claims and defenses for ultimate determination by either the family or circuit court. Under these sad circumstances, [Frank] will not prevent the closing, and expressly directs escrow to close the transaction.

On February 8, 2000, the court entered a decision and order stating, in relevant part, as follows:

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Related

Hsieh v. Sun
365 P.3d 1019 (Hawaii Intermediate Court of Appeals, 2016)
Schenk v. Schenk
81 P.3d 1216 (Hawaii Supreme Court, 2004)

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Bluebook (online)
81 P.3d 1218, 103 Haw. 303, 2003 Haw. App. LEXIS 379, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schenk-v-schenk-hawapp-2003.