Winn v. Brady. ICA Opinion, filed 12/19/2023 [ada]. Application for Writ of Certiorari, filed 03/18/2024. S.Ct. Order Accepting Application for Writ of Certiorari, filed 4/30/2024.

Hawaii Supreme Court·Decided June 13, 2025·No. SCWC-17-0000806·Published

Opinion

Electronically Filed

Supreme Court

SCWC-XX-XXXXXXX

13-JUN-2025

08:04 AM

Dkt. 23 OP

IN THE SUPREME COURT OF THE STATE OF HAWAI‘I ---o0o---

PETER J. WINN and WESTMINSTER REALTY, INC., Respondents/Plaintiffs-Appellants,

vs.

WADE BRADY and KATHERINE T. BRADY, individually and as trustees of the WADE K. BRADY FAMILY TRUST;

CONTEMPORARY KAMAʻAINA, LLC; WESTMINSTER REALTY, INC.

as trustee of the 2806 KOLEPA PLACE TRUST DATED DECEMBER 14, 2010; ERIC L. KEILLOR; and ERIC S. HART, Respondents/Defendants-Appellees,

and

JAMES E. SPENCE and BEVERLY C. SPENCE, Petitioners/Intervenors-Appellees,

and

STEPHEN R. SPENCE and VALORIE A. SPENCE, Respondents/Intervenors-Appellees.

SCWC-XX-XXXXXXX

CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS (CAAP-XX-XXXXXXX; CASE NO. 2CC121000087)

JUNE 13, 2025

RECKTENWALD, C.J., McKENNA, EDDINS, AND DEVENS, JJ., AND CIRCUIT JUDGE KUBOTA IN PLACE OF GINOZA, J., RECUSED

OPINION OF THE COURT BY DEVENS, J.

This appeal raises the question of whether the holder of a recorded judgment lien has a protected property interest pursuant to Hawaiʻi Revised Statutes (HRS) § 636-3 (2016). We answer this question in the affirmative. We further address the due process notice requirements owed to a junior judgment lienholder prior to an execution sale. We hold that such a lienholder is entitled to notice consistent with due process pursuant to article I, section five of the Hawaiʻi Constitution. However, due to the potential impact of our decision on prior and pending execution sales, and considering the substantial prejudice to the intervenors, this decision, requiring that notice consistent with due process be provided to junior judgment lienholders who recorded judgments pursuant to HRS § 636-3, shall apply prospectively only.

I. BACKGROUND

This case concerns a property on Maui (Haleakalā Highway Property or the Property) in which Wade Brady owned a 50% interest. In 2010, Beverly and James Spence (the Spences) obtained a default judgment against Wade Brady and his wife, Katherine Brady, (the Bradys) in the amount of $152,350.62 in the Circuit Court of the Second Circuit (circuit court). 1 On

1 The Honorable Joel E. August presided.

March 9, 2011, the Spences recorded a judgment lien against Wade Brady’s 50% interest in the Haleakalā Highway Property with the Bureau of Conveyances (BOC).

After the Bradys failed to satisfy their debt, the Spences obtained a writ of execution pursuant to HRS Chapter 651 on the Haleakalā Highway Property which authorized the execution sale of the Property to satisfy the Spences’ judgment. 2 Prior to the execution sale, the independent civil process server in charge of the Haleakalā Highway Property’s public auction advertised and posted the sale by publication pursuant to and in compliance with HRS § 651-43 in four places: the Haleakalā Highway Property, the Makawao Public Library, Hoapili Hale (the location of the circuit court), and the Makawao Post Office. HRS § 651-43 required the posting of written or printed notice in three conspicuous places within the district where the subject property was located, but did not require personal notice to be served on any lienholders. HRS § 651-43 (2016).

Wade Brady’s 50% interest in the Haleakalā Highway Property was sold to the Spences via Haleakalā Estate Properties, LLC for $25,001.00 at a confirmation hearing held on April 30, 2015, after the Property had sold at public auction on February 3,

2 The Honorable Rhonda I.L. Loo granted this motion and the subsequent order confirming the sale of the Property to the Spences via Haleakalā Estate Properties, LLC.

2015. At the time of the sale, there were multiple encumbrances on the Property, which included two senior mortgages, the Spences’ judgment lien, and a junior judgment lien recorded by Peter J. Winn and Westminster Realty, Inc. (the Winn parties). 3 The Winn parties did not receive personal or actual notice of the execution sale by public auction of the Haleakalā Highway Property.

On June 3, 2015, the circuit court filed an order confirming the sale and conveyance of Wade Brady’s 50% interest in the Haleakalā Highway Property “free of all liens that are subsequent and/or junior to the lien of the Final Judgment, which is the judgment under which the Property has been sold in this case.” The Spences and their relatives subsequently acquired the other 50% interest in the Property, and, according to the record, are the current titleholders of the entire parcel.

On February 6, 2013, approximately two years after the

3 At the time of the execution sale, there were four liens encumbering the Property: a senior mortgage in the amount of $595,000.00 held by Finance Factors, Ltd.; a second senior mortgage in the amount of $592,000.00 held by Mortgage Electronic Registration Systems, Inc. (MERS), as a nominee for First Hawaiian Bank; the Spences’ judgment lien; the Winn parties’ judgment lien; and an additional, subsequent judgment lien held by the Spences. According to the title report filed by the Winn parties, the mortgage held by Finance Factors, Ltd. no longer encumbered the Property as of May 30, 2017. However, the $592,000.00 mortgage loan executed with MERS, as a nominee for First Hawaiian Bank, remained, and the Spences executed a subsequent mortgage loan on the Property in the amount of $623,500.00 with MERS, as a nominee for Mangum Mortgagem Inc., d.b.a. Pacific Home Loans.

Spences recorded their judgment with the BOC and before the execution sale of the Property, the Winn parties also recorded a judgment lien against Wade Brady’s 50% interest in the Haleakalā Highway Property after they obtained a default judgment against the Bradys for $951,591.51, plus attorney fees and costs totaling $4,091.90.

The Bradys failed to satisfy their debt with the Winn parties, and on May 23, 2017, two years after Wade Brady’s 50% interest in the Haleakalā Highway Property was sold at auction to the Spences, the Winn parties filed a motion requesting that a writ of execution be levied on the Haleakalā Highway Property.

The circuit court initially granted the Winn parties’

motion. 4 However, the Spences intervened and filed a motion for reconsideration of the order granting the Winn parties’ writ of execution on the Property. Subsequently, the Winn parties filed a motion to amend the first writ of execution on the Property.

At the hearing on the Winn parties’ motion, the circuit court concluded that the Winn parties were not entitled to actual notice of the Haleakalā Highway Property’s execution sale, the Winn parties’ judgment lien on the Property extinguished in 2015, and the Winn parties had “sat on [their] rights for many years.” Accordingly, the circuit court granted

4 The Honorable Rhonda I.L. Loo presided.

the Spences’ motion for reconsideration of the Winn parties’ writ on the Property, and denied the Winn parties’ motion to amend their writ of execution on the Property.

The Winn parties appealed the circuit court’s order to the Intermediate Court of Appeals (ICA). The Winn parties argued that as junior judgment lienholders, they held a constitutionally protected property interest in the Haleakalā Highway Property pursuant to HRS § 636-3, and that the execution sale deprived the Winn parties of their due process when it extinguished their lien without being afforded personal or actual notice of the public auction. The Winn parties argued that the statutory requirement of notice by publication was insufficient and that due process required “personal notice” of the Haleakalā Highway Property’s sale.

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Winn v. Brady. ICA Opinion, filed 12/19/2023 [ada]. Application for Writ of Certiorari, filed 03/18/2024. S.Ct. Order Accepting Application for Writ of Certiorari, filed 4/30/2024., (haw 2025).

Winn v. Brady. ICA Opinion, filed 12/19/2023 [ada]. Application for Writ of Certiorari, filed 03/18/2024. S.Ct. Order Accepting Application for Writ of Certiorari, filed 4/30/2024. (Winn v. Brady. ICA Opinion, filed 12/19/2023 [ada]. Application for Writ of Certiorari, filed 03/18/2024. S.Ct. Order Accepting Application for Writ of Certiorari, filed 4/30/2024.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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