Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Lopez v. State

Supreme Court of Hawai'i

February 12, 2014

PATRICK LOPEZ, Petitioner/Plaintiff-Appellant,
v.
STATE OF HAWAI'I, Respondent/Defendant-Appellee

CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS. CAAP-11-0000512; CIV. NO. 09-1-1613.

Eric A. Seitz, for petitioner.

Kimberly Tsumoto Guidry, for respondent.

RECKTENWALD, C.J., NAKAYAMA, AND POLLACK, JJ., AND CIRCUIT JUDGE LEE, IN PLACE OF McKENNA, J., RECUSED, WITH ACOBA, J., DISSENTING SEPARATELY.

OPINION

Page 321

[133 Hawai'i 312] RECKTENWALD, C.J.

This appeal requires us to consider whether a lien recorded by the Child Support Enforcement Agency (CSEA) for unpaid child support has priority over an attorney's lien established for payment of fees in an unrelated, subsequently filed action. In 1997, the CSEA recorded a statutory lien on Patrick Lopez's real and personal property for delinquent child support. More than a decade later, on June 30, 2008, Lopez entered into a contingency agreement with the law firm of Eric A. Seitz for legal representation in an unrelated civil action for personal injury. Under the agreement, Seitz's law firm was to receive one-third of any recovery obtained. Seitz's law firm filed a personal injury action on behalf of Lopez against the State, which resulted in a $9,000 arbitration award in Lopez's favor. A dispute then arose between the State and Seitz's law firm as to whether the 1997 CSEA lien, which amounted to more than $9,000, had priority over Seitz's attorney's lien.

Lopez requested that the circuit court order the State to, inter alia, " make full payment" of the arbitration award. Seitz asserted that his interest in fees was distinct from any lien on Lopez's property. In opposition, the State argued that Hawai'i Revised Statutes (HRS) § 576D-10.5, which governs CSEA liens, provides that CSEA liens have priority over all other liens except for tax liens. The State also argued that HRS § 507-81, which governs attorney's liens, provides that an attorney's lien is established after commencement of the action; thus, because Lopez's action commenced after the CSEA lien was recorded, the CSEA lien has priority. The circuit court ruled that the CSEA's statutory lien had priority over Lopez's attorneys' lien and denied Lopez's motion.[1]

Page 322

Lopez appealed, arguing that the circuit court erred in denying his motion because his attorneys' lien constitutes a property interest that is independent from Lopez's interest in the judgment, and that thus, equitable and [133 Hawai'i 313] public policy considerations favor giving an attorney's lien priority over the CSEA's lien. The Intermediate Court of Appeals (ICA) affirmed the circuit court's order. Lopez v. State, 128 Haw. 497, 291 P.3d 395, 2012 WL 5520465, at *2 (Haw. App. 2012).

For the reasons set forth below, we hold that HRS § 507-81 does not provide a superior or independent right for an attorney's property interest in a judgment over a prior recorded CSEA lien. Accordingly, we affirm the ICA's December 12, 2012 judgment.

I. Background

The following factual background is taken from the record on appeal.

A. CSEA and Attorney's Liens

On August 20, 1997, the Office of Child Support Hearings of the State Department of the Attorney General filed an administrative order in the Family Court of the First Circuit stating that Lopez owed $17,964 in child support debt. The administrative order was filed in the state Bureau of Conveyances on September 15, 1997. Thus, a CSEA lien was placed on Lopez's real and personal property. See HRS § 576D-10.5.[2]

On June 30, 2008, Lopez entered into a contingency agreement with Seitz's law firm for legal representation in a civil action for personal injury. The agreement stated that Seitz's law firm would receive one-third of any recovery obtained, and provided that the firm " is given a lien for its fees, costs, and expenses upon any judgment or settlement and is authorized to deduct such fees, costs, and expenses therefrom and to pay the balance to [Lopez]."

On July 13, 2009, Seitz's law firm filed a complaint on behalf of Lopez against the State for injuries Lopez allegedly suffered during his incarceration at the Halawa Correctional Facility. In addition to damages, Lopez sought " reimbursement of his costs and expenses herein, including reasonable provision for his attorneys' fees[.]"

On May 18, 2010, the CSEA notified Seitz that it was asserting its 1997 lien on Lopez's property and that the lien amount was $23,969.99 as of April 30, 2010:

In accordance with HRS § 576D-10.5, the CSEA hereby asserts its statutory lien upon all of Lopez's personal and real property including any settlement or other funds which you are now holding or will be holding in the future for Lopez, to be applied against Lopez's child support arrears.
. . . .
The CSEA has learned that Lopez may be receiving an award of funds in the captioned litigation. The CSEA requires that you pay any such funds or property due to him pursuant to CSEA's lien up to the amount owing of $23,969.99, which may be subject to change, pursuant to HRS § 576D-10.5.

Page 323

Lopez's civil action was placed in the Court Annexed Arbitration Program, and on August 10, 2010, an arbitrator found that Lopez was entitled to damages in the amount of [133 Hawai'i 314] $9,000 but did not award Lopez any costs.[3] On September 9, 2010, the arbitrator's award in favor of Lopez and against the State was entered as final judgment in the case. According to Seitz, Seitz's law firm and the State then exchanged letters between September 2010 and December 2010 expressing their opposing views regarding the priority of the CSEA's lien and the attorney's lien.

B. Circuit Court Proceedings

On January 14, 2011, Lopez filed a Motion for Issuance of Writ of Execution/Mandamus pursuant to Hawai'i Rules of Civil Procedure Rule 69. The motion requested that the circuit court " command[] [the State] to make full payment of the judgment entered herein on September 9, 2010 plus interest, and award [Lopez] his attorneys fees and costs for bringing this motion, or to appear before [the] Court and show cause why [the State] has not done so." [4]

Page 324

On March 9, 2011, the State filed a memorandum in opposition to Lopez's motion. The State noted that resolution of Lopez's motion turned on interpretation of HRS § § 507-81 [5] and 576D-10.5. [6] The State argued [133 Hawai'i 315] that a plain reading of HRS § 576D-10.5 mandates priority of the CSEA lien over Lopez's attorneys' lien. The State also argued that, when HRS § 576D-10.5 is read with HRS § 507-81, " there is no question that CSEA liens have priority." The State contended that Lopez's " unrecorded attorney's lien" became effective in 2009, when Lopez's action commenced, and that the CSEA lien, which was recorded in September 1997, " clearly has priority over the attorney's lien." Finally, the State argued that to interpret HRS § 507-81 to give attorney's liens priority over CSEA liens would contravene public policy that favors parents supporting their children. The State asked the circuit court to deny Lopez's motion and " order that the State pay all judgment proceeds in this case directly to the [CSEA] to be applied to [Lopez's] outstanding child support obligation."

On March 14, 2011, the CSEA filed a Substantive Joinder in the State's opposition, stating that as of April 30, 2010, Lopez owed $23,969.99 in child support arrears, including $7,225.61 to the Mother, and $16,744.39 to the State of Washington as reimbursement for welfare payments made by the State of Washington. The CSEA argued that its lien takes priority over Lopez's attorneys' claim for attorney's fees and costs " because the child support lien was recorded twelve (12) years before Lopez commenced the instant suit, and HRS § 576D-10.5 gives a child support lien priority over any claim or any unrecorded lien whenever acquired, except tax liens previously acquired." [7] The CSEA also discussed several circuit court orders in unrelated cases which held that CSEA recorded liens had priority over unrecorded attorney's liens. Finally, the CSEA argued that the CSEA lien should have priority over Lopez's attorney's fees as a matter of public policy.

Page 325

In his reply, Lopez argued that the CSEA lien does not have priority over his attorneys' lien under HRS § 507-81 because the legislature intended HRS § 507-81 " to give attorneys their own property interest in a judgment for their compensation which is independent of the client's interest in the judgment[.]" Lopez also noted that HRS § § 576D-10.5(a) [133 Hawai'i 316] and (b) provide that " a delinquency in child support payments gives rise to a lien only on the 'obligor's real and personal property.'" (Emphasis altered). Therefore, Lopez argued, the CSEA lien does not have priority over the attorney's lien, which attaches to the judgment independent from the " property" due to Lopez. Lopez also argued that until he filed the underlying action in 2009, there was no " personal property" that CSEA could have made subject to its lien when it was recorded in 1997. Accordingly, Lopez argued, the CSEA lien is not exempt from the general superiority of attorney's liens under HRS § 507-81(c), which provides, in relevant part, that " [e]xcept for . . . prior liens of record on the real and personal property subject to the lien created by this section, . . . the attorney's lien is superior to all other liens." Finally, Lopez argued that public policy favors giving attorney's liens priority over other liens " because it is often crucial for persons who may be judgment debtors to be able to retain legal counsel to obtain legal remedies to which they are entitled, and a client/debtor's ability to retain counsel may also accrue to the benefit of the client/debtor's creditors." (Citation omitted).

Following a hearing, the circuit court entered an order denying Lopez's motion. The order stated that " to be consistent, it will follow the prior rulings on this issue that ordered that the [CSEA's] statutory lien has priority over [Lopez's] counsel's lien for attorney's fees." The order also directed that the State hold the funds at issue pending the outcome of any appeal.

C. ICA Appeal

Lopez timely filed a notice of appeal. Lopez raised a single point of error: The Circuit Court erred in denying [Lopez's] Motion for Issuance of Writ of Execution/Mandamus and concluding that the [CSEA's] statutory lien has priority over [Lopez's] counsel's lien for attorney's fees. Lopez argued that his attorneys' property interest in the underlying arbitration award is independent from Lopez's interest in the award. Therefore, Lopez argued, " equitable and public policy considerations favor affording greater priority to contractual attorney's liens over the [CSEA's] statutory liens." Lopez also argued that there are " sufficient ambiguities" in HRS § § 507-81 and 576D-10.5 such that the circuit court should have considered those statutes in pari materia.

Lopez also argued that the circuit court's application of HRS § 576D-10.5 is unconstitutional and violates the due process rights afforded to Lopez's attorneys, as the attorney's lien represents his counsel's property. Specifically, Lopez argued, " [i]nasmuch as attorneys have a property interest in judgments awarded to their clients, then Article I, Section 5 of the Hawai'i State Constitution applies[.]" Lopez also argued that HRS § 576D-10.5 requires that enforcement of CSEA statutory liens " be subject to due process safeguards[.]" (Emphasis omitted).

Finally, Lopez argued that public policy and equitable considerations support a ruling that an attorney's lien has greater priority over the CSEA lien in this case. Lopez argued that it is " well-established public policy" that attorney's liens have priority over other judgment creditors' liens because it is " often crucial for persons who may be judgment debtors to be able to retain legal counsel to obtain legal remedies to which they are entitled." Lopez also argued that a judgment debtor's ability to retain legal representation may benefit judgment creditors such as the CSEA insofar as legal assistance may result in obtaining additional proceeds.

In a memorandum opinion, the ICA affirmed the circuit court's order denying Lopez's motion for writ of execution/mandamus. Lopez, 128 Haw. 497, 2012 WL 5520465, at *2. The ICA first stated that the language in HRS § 576D-10.5 governing CSEA liens is " not ambiguous, but clearly articulates the priority of child support liens over subsequent liens, other than tax liens." 128 Haw. 497, Id. at *1. The ICA noted that the CSEA recorded the child support lien in 1997, more than ten years before the attorney's lien arose. 128 Haw. 497, Id. at *2. Thus, the ICA held, the plain language of HRS § 576D-10.5 affords the CSEA lien superior priority over the subsequent attorney's lien. Id.

Page 326

The ICA further stated that granting priority to the CSEA lien pursuant to HRS § 576D-10.5 [133 Hawai'i 317] is consistent with HRS § 507-81(c). Id. The ICA determined that the plain language of HRS § 507-81(c) gives a prior recorded lien such as the CSEA lien priority over a subsequent attorney's lien. Id. Finally, the ICA noted that contrary to Lopez's assertion that HRS § 507-81 creates a property interest for the attorney independent from the client, HRS § 507-81(k) provides that " [a]ttorneys have the same right and power over . . . judgments . . . and awards to enforce their liens as the clients have for the amount due thereon to them." Id. Therefore, the ICA held, HRS § 507-81 " does not provide a superior or separate right for an attorney, but grants the attorney the same right to the judgment as the client." Id. The ICA, thus, affirmed the circuit court's judgment. Id. The ICA subsequently entered its judgment on appeal on December 12, 2012.

Lopez timely filed an application for writ of certiorari, in which he raises the following questions:

1. Did the ICA gravely err in failing to apply the proper and well-established rules of statutory interpretation as enunciated in Haole v. State, 111 Hawai'i 144 [, 140 P.3d 377] (2006)?
2. Did the ICA gravely err in concluding that the language in HRS § 576D-10.5 is not ambiguous?
3. Did the ICA gravely err in concluding that HRS § 507-81 does not provide a superior or separate right for an attorney's property interest in a judgment over a prior recorded lien?

The State timely filed its response.

II. Standard of Review

" Statutory interpretation is a question of law reviewable de novo." Kaleikini v. Yoshioka, 128 Hawai'i 53, 67, 283 P.3d 60, 74 (2012) (quoting First Ins. Co. of Hawai'i v. A& B Props., Inc., 126 Hawai'i 406, 414, 271 P.3d 1165, 1173 (2012)). It is well-established that the " fundamental starting point for statutory interpretation is the language of the statute itself." First Ins. Co. of Hawai'i, 126 Hawai'i at 414, 271 P.3d at 1173 (quoting State v. Wheeler, 121 Hawai'i 383, 390, 219 P.3d 1170, 1177 (2009)). " [W]here the statutory language is plain and unambiguous, our sole duty is to give effect to its plain and obvious meaning." Id. Moreover, " implicit in the task of statutory construction is our foremost obligation to ascertain and give effect to the intention of the legislature, which is to be obtained primarily from the language contained in the statute itself." Id. " [W]hen there is doubt, doubleness of meaning, or indistinctiveness or uncertainty of an expression used in a statute, an ambiguity exists." Id.

III. Discussion

A. The CSEA lien takes priority over Lopez's attorney's lien

Lopez argues that the language in HRS § 576D-10.5 is ambiguous; specifically, he argues that subsections (a), (b), and (f) of the statute create an ambiguity as to what portions of a judgment are the property of the obligor, and as to what other " applicable state law[s]" govern the execution of CSEA's statutory liens. Lopez contends that because the statute is ambiguous, it must be construed in pari materia with HRS § 507-81, which, according to Lopez, gives attorneys a vested property interest in judgments. Therefore, Lopez argues, his attorneys' lien on the judgment is an interest separate from the judgment proceeds due to Lopez, the latter of which is subject to the CSEA ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.