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In Re: Sunra Coffee, LLC, Debtor. v. Hawaii National Bancshares

August 21, 2012

IN RE: SUNRA COFFEE, LLC, DEBTOR.
MICHAEL NEKOBA, APPELLANT,
v.
HAWAII NATIONAL BANCSHARES, INC., DBA HAWAII NATIONAL BANK, APPELLEE.



Appeal from the United States Bankruptcy Court for the District of Hawaii Honorable Robert J. Faris, Chief Bankruptcy Judge, Presiding Bankr. No. 09-01909 Adv. Proc. 10-90009

SUSAN M SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT

MEMORANDUM*fn1

Submitted Without Oral Argument on July 20, 2012*fn2

Filed - August 21, 2012

Before: PAPPAS, JURY and HOLLOWELL, Bankruptcy Judges.

1 Appellant Michael Nekoba ("Nekoba") appeals a final judgment 2 and subsequent charging order entered by the bankruptcy court in 3 favor of Appellee Hawaii National Bank ("HNB") and against him.

We AFFIRM.

I. FACTS

The facts in this case are undisputed.

Debtor Sunra Coffee, LLC ("Sunra") owns and operates coffee farms and engages in the production of coffee products in Hawaii.

Nekoba is a certified public accountant and member of Sunra.

Among Sunra's properties was a 214-acre development known as the Royal Hualalai Gardens (the "Property"). Sunra obtained several loans from HNB secured by mortgages against the Property. Nekoba signed commercial guarantees of Sunra's obligations to HNB on the loans secured by the Property. ER at 34-36.

HNB filed a complaint in Hawaii state court on December 3, 16 2008, alleging that Sunra defaulted on its obligations to HNB 17 under the notes and mortgages. ER at 1. Hawaii Nat'l Bank v. 18 Sunra Coffee, civ. no. 08-1-00377 (Third Circuit, State of Hawaii) 19 (the "State Court Action"). Nekoba was named as a defendant in 20 the State Court Action, and was served with a summons and 21 complaint. ER at 32, EER at 10. Nekoba concedes that he did not 22 file a counterclaim against HNB, nor a cross-claim against Sunra 23 for indemnification or contribution, in the State Court Action.

24 Nekoba Op. Br. at 3. Indeed, Nekoba made no appearance at all in 25 the State Court Action. ER at 34. On August 3, 2009, the state 26 court entered a default judgment against Sunra and Nekoba for 27 $9,249,245.89, plus interest from February 20, 2009, of $4,233.90 28 per diem. ER at 33, 36.

1 Sunra filed a petition for relief under chapter 11 on 2 August 21, 2009. An official committee of unsecured creditors was 3 appointed on September 2, 2009 (the "Committee"). Bankr. dkt. 4 no. 28.

5 HNB filed a motion for relief from the automatic stay on 6 December 1, 2009, seeking an order allowing it to proceed to 7 foreclose on the Property. Without opposition, the bankruptcy 8 court ...


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